Biosev S A : 1Q21 Financial Statements

September 18, 2020 at 03:25 am EDT

(Convenience Translation into English from the Original Previously Issued in Portuguese)

Biosev S.A.

Individual and Consolidated

Interim Financial Statements

For the Three-month Period Ended

June 30, 2020

Interim Financial Statements
June 30, 2020
CONTENTS
REVIEW REPORT OF INDEPENDENT AUDITOR'S .................................................................................	04
BALANCE SHEET .......................................................................................................................................	06
STATEMENT OF OPERATIONS .................................................................................................................	07
STATEMENT OF COMPREHENSIVE INCOME (LOSS) ............................................................................	08
STATEMENT OF CHANGES IN EQUITY ....................................................................................................	09
STATEMENT OF CASH FLOWS .................................................................................................................	10
STATEMENT OF VALUE ADDED ...............................................................................................................	11
	NOTES
1.	GENERAL INFORMATION.......................................................................................................................	12
2.	SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES ...................................................................	13
3.	CASH AND CASH EQUIVALENTS ..........................................................................................................	14
4.	SHORT- AND LONG-TERM INVESTMENTS...........................................................................................	14
5.	TRADE RECEIVABLES............................................................................................................................	14
6.	INVENTORIES .........................................................................................................................................	15
7.	BIOLOGICAL ASSETS .............................................................................................................................	16
8.	RECOVERABLE TAXES ..........................................................................................................................	17
9.	ESCROW DEPOSITS...............................................................................................................................	17
10.	ASSETS AND LIABILITIES HELD FOR SALE .........................................................................................	18
11.	CURRENT AND DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION .........................................	18
12.	LEASES....................................................................................................................................................	21
13.	INVESTMENTS (PROVISION FOR INVESTMENT LOSS) ......................................................................	23
14.	PROPERTY, PLANT AND EQUIPMENT..................................................................................................	25
15.	INTANGIBLE ASSETS .............................................................................................................................	26
16.	BORROWINGS AND FINANCING ...........................................................................................................	28
17.	TRADE PAYABLES ..................................................................................................................................	29
18.	TAXES PAYABLE.....................................................................................................................................	30
19.	PROVISION FOR TAX, LABOR, CIVIL AND ENVIRONMENTAL CONTINGENCIES .............................	30
20.	RELATED PARTIES .................................................................................................................................	32
21.	EQUITY ....................................................................................................................................................	36
22.	NET REVENUE AND COST OF SALES AND SERVICES.......................................................................	37
23.	EXPENSES BY NATURE .........................................................................................................................	38
24.	FINANCE INCOME (EXPENSES) ............................................................................................................	39
25.	OTHER OPERATING INCOME (EXPENSES) .........................................................................................	39
26.	LOSS PER SHARE...................................................................................................................................	40
27.	RISK MANAGEMENT AND FINANCIAL INSTRUMENTS ........................................................................	40

28.	COMMITMENTS.......................................................................................................................................	49
29.	EMPLOYEES' BENEFIT...........................................................................................................................	50
30.	SEGMENT INFORMATION ......................................................................................................................	50
31.	APPROVAL OF INTERIM FINANCIAL STATEMENTS ............................................................................	51

(Convenience Translation into English from the Original Previously Issued in Portuguese)

INDEPENDENT AUDITOR'S REVIEW REPORT ON THE INTERIM FINANCIAL INFORMATION

To the

Board of Directors and Shareholders

Biosev S.A.

São Paulo - SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Biosev S.A. ("Company"), contained in the Quarterly Information Form - ITR for the quarter ended June 30, 2020, which comprises the statement of financial position as of June 30, 2020, and the respective statements of profit or loss, other comprehensive income, changes in equity and cash flows for the three-month period then ended, including the explanatory notes.

The Company´s management is responsible for the preparation of this individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting and IAS 34 - Interim Financial Reporting, issued by International Accounting Standards Board (IASB), as well for the presentation of this information in accordance with standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with the Brazilian and International standards on review engagements of interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the audit standards and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the Quarterly Information referred to above has not been prepared, in all material respects, in accordance with Technical Pronouncement CPC 21 (R1) and IAS 34, issued by IASB, applicable to the preparation of Quarterly Information - ITR, and presented in accordance with standards issued by the Brazilian Securities and Exchange Commission.

Emphasis of matter

Transactions with related parties

The Company and its subsidiaries have carried out significant transactions with related parties of the Louis Dreyfus Company Group. The effects on results of these transactions and the corresponding assets and liabilities are disclosed in note 20. Our opinion is not modified with respect to this matter.

Other matters

Statements of Value Added

The quarterly information referred to above includes the individual and consolidated statements of value added for the three-month period ended June 30, 2020. These statements are the responsibility of the Company's management and are presented as supplementary information under IAS 34. These statements have been subjected to review procedures performed together with the review of the interim accounting information for the purpose of concluding whether they are reconciled with the interim accounting information and accounting records, as applicable, and if their form and content are in accordance with the criteria defined in the accounting standard CPC 09 - "Statement of Value Added". Based on our review, nothing has come to our attention that causes us to believe that these statements of value added have not been properly prepared, in all material respects, in accordance with the criteria established in this accounting standard, and consistent with the individual and consolidated interim accounting information taken as a whole.

The accompanying individual and consolidated interim financial information has been translated into English for the convenience of readers outside Brazil.

São Paulo, September 17, 2020.

BDO RCS Auditores Independentes SS

CRC 2 SP 013846/O-1

Francisco de Paula dos Reis Júnior

Accountant CRC 1 SP 139268/O-6

Biosev S.A.

(Convenience Translation into English from the Original Previously Issued in Portuguese)															-		-		-		-
BALANCE SHEET
AS AT JUNE 30, 2020
(In thousands of Brazilian reais - R$)
				Company			Consolidated					Company			Consolidated
ASSETS	Note	06.30.20		03.31.20		06.30.20		03.31.20		LIABILITIES AND EQUITY	Note	06.30.20		03.31.20		06.30.20		03.31.20
CURRENT ASSETS																		CURRENT LIABILITIES
Cash and cash equivalents	3		114,802		396,124	359,383	1,174,943	Borrow ings and financing	16	421,054		2,935,559	1,168,611	7,225,234
Short-term investments	4		58,701		42,052	69,858	52,245	Lease liabilities	12	200,569		215,257	477,464	498,932
Derivative financial instruments	27		93,131		225,787	97,252	225,787	Advances from domestic customers		112,114		7,611	140,694	28,128
Trade receivables	5		244,271		210,771	448,749	202,050	Advances from foreign customers		836,233		968,764	2,292,160	2,585,641
Inventories	6		1,368,611		1,105,650	2,755,825	2,948,633	Trade payables	17	316,809		309,104	690,168	798,903
Biological assets	7		404,900		303,621	775,238	663,908	Accrued payroll and related taxes		56,607		47,218	110,115	90,483
Recoverable taxes	8		66,001		50,274	153,299	158,777	Taxes payable	18	21,203		21,314	69,442	75,152
Other receivables				51,891			44,364	100,907	88,170	Derivative financial instruments	27	338,255		575,188	353,256	586,843

				2,402,308			2,378,643		4,760,511	5,514,513	Other payables		68,228		80,594	114,509	118,051
Assets held for sale	10																	Total current liabilities
		37,777			45,165		37,777	45,165		2,371,072		5,160,609	5,416,419	12,007,367


Total current assets				2,440,085			2,423,808	4,798,288	5,559,678
NON-CURRENT ASSETS
Long-term receivables																		NON-CURRENT LIABILITIES
Advances to suppliers			35,723		34,719	59,136	56,602	Borrow ings and financing	16	2,750,257		67,484	6,593,297	96,191
Escrow deposits	9		189,656		192,166	383,113	385,413	Lease liabilities	12	531,816		516,857	1,215,719	1,182,337
Recoverable taxes	8		10,784		11,502	82,003	57,529	Advances from foreign customers	20	845,311		802,505	-		626,116
Derivative financial instruments	27		-		-		-		55,885	Trade payables	17	4,622	5,733	4,857	5,965
Deferred income tax and social contribution	11.1		345,377		418,029	856,718	872,971	Deferred income tax and social contribution	11.1	-		-		36,383	36,883
Other receivables			306,082		335,939	319,104	320,012	Derivative financial instruments	27	-		-		17,563	16,596
Right to use the assets from lease operations	12		700,329		700,306	1,588,562	1,577,379	Provision for tax, labor, civil and enviromental contingencies	19	112,810		108,081	308,175	294,668
Investments	13		1,264,952		1,240,462	157,457	160,393	Taxes payable	18	18,324		18,501	18,324	18,501
Property, plant and equipment	14		1,542,181		1,635,433	3,266,705	3,477,391	Other payables		65,195		86,047	135,643	167,247

Intangible assets	15			10,456			11,856	920,138	921,964	Provision for investment loss	13	1,467,473		1,251,234	-		-

Total non-current assets				4,405,540			4,580,412	7,632,936	7,885,539	Total non-current liabilities		5,795,808		2,856,442	8,329,961	2,444,504
																		EQUITY
																		Capital	21	6,077,674		6,077,674	6,077,674	6,077,674
																		Capital reserve	21	1,353,937		1,353,937	1,353,937	1,353,937
																		Accumulated losses		(8,448,523)	(8,167,310)	(8,448,523)	(8,167,310)
																		Other comprehensive loss			(304,343)	(277,132)	(304,343)	(277,132)

																		Total equity attributable to the Company's ow ners			(1,321,255)	(1,012,831)	(1,321,255)	(1,012,831)
																		Non-controlling interests			-			-	6,099	6,177


																		Total equity			(1,321,255)	(1,012,831)	(1,315,156)	(1,006,654)

TOTAL ASSETS			6,845,625		7,004,220	12,431,224	13,445,217	TOTAL LIABILITIES AND EQUITY		6,845,625		7,004,220	12,431,224	13,445,217
The accompanying notes are an integral part of these interim financial statements.
																											6

Biosev S.A.

(Convenience Translation into English from the Original Previously Issued in Portuguese)

STATEMENT OF OPERATIONS

FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020 (In thousands of Brazilian reais - R$)

			Company			Consolidated
			Three-month period	Three-month period
			ended			ended
	Note	06.30.20		06.30.19				06.30.20		06.30.19
NET REVENUE	22		935.830		1.002.036			2.669.626	1.718.364
Cost of sales and services	22 and 23	(676.028)	(837.691)			(2.258.454)	(1.487.628)

GROSS PROFIT			259.802		164.345			411.172	230.736

OPERATING INCOME (EXPENSES)			(223.339)	(240.956)			(185.621)	(217.837)
General, administrative and selling expenses	23		(42.500)	(52.637)			(154.667)	(109.237)
Equity in subsidiaries	13		(174.277)	(153.644)			(2.936)	(3.475)
Other operating income	25		6.348		3.497			8.414	8.409
Other operating expenses	25		(12.910)	(38.172)			(36.432)	(113.534)

OPERATING INCOME (LOSS) BEFORE FINANCE INCOME (COSTS)			36.463		(76.611)			225.551	12.899
Finance income	24		5.182		7.168			8.512	12.967
Finance costs	24		(83.382)	(74.789)			(160.221)	(149.531)
Derivatives	24		2.980		41.243			49.376	9.279
Exchange rate changes	24		(171.329)	40.866			(383.428)	76.284

LOSS BEFORE TAXES			(210.086)	(62.123)			(260.210)	(38.102)
INCOME TAX AND SOCIAL CONTRIBUTION	11.2		(71.127)	(106.698)			(21.081)	(130.792)

LOSS FOR THE PERIOD			(281.213)	(168.821)			(281.291)	(168.894)
Attributable to:

Company's ow ners	26		(281.213)	(168.821)			(281.213)	(168.821)
Non-controlling interests			-		-				(78)	(73)
LOSS PER SHARE - R$
Basic	26		(0,59327)	(0,43694)			(0,59327)	(0,43694)
Diluted	26		(0,59327)	(0,43694)			(0,59327)	(0,43694)

The accompanying notes are an integral part of these interim financial statements.

Biosev S.A.

(Convenience Translation into English from the Original Previously Issued in Portuguese)

STATEMENT OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020 (In thousands of Brazilian reais - R$)

Company

Three-month period ended

Consolidated

Three-month period ended

	Note	06.30.20		06.30.19		06.30.20		06.30.19
LOSS FOR THE YEAR		(281.213)	(168.821)	(281.291)	(168.894)
OTHER COMPREHENSIVE INCOME (LOSS)
Items subsequently reclassified to profit or loss:
Financial instruments - hedge accounting of futures	27	(48.611)	20.778	(48.611)	20.778
Financial instruments - hedge accounting of Libor sw ap	27	(934)	(6.205)	(934)	(6.205)
Financial instruments - hedge accounting of Non-Deliverable Forw ard (NDF)	27	(10.164)	(19.111)	(10.164)	(19.111)
Financial instruments - hedge accounting of exchange differences	27	18.481		33.868	18.481	33.868
Deferred income tax and social contribution related to components of other comprehensive income (loss)	11.3	14.017		(9.972)	14.017	(9.972)

		(27.211)	19.358	(27.211)	19.358

COMPREHENSIVE LOSS FOR THE PERIOD		(308.424)	(149.463)	(308.502)	(149.536)
Attributable to:

Company's ow ners		(308.424)	(149.463)	(308.424)	(149.463)
Non-controlling interests		-		-		(78)	(73)

The accompanying notes are an integral part of these interim financial statements.

Biosev S.A.

(Convenience Translation into English from the Original Previously Issued in Portuguese)

STATEMENT OF CHANGES IN EQUITY

FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020 (In thousands of Brazilian reais - R$)

									Other
					Capital			comprehensive			Accumulated			Non-controlling		Total consolidated
		Capital		reserve			income (loss)			losses		Company's equity	interests		equity
BALANCES AS AT MARCH 31, 2019		6,077,674		1,353,937	(287,906)	(6,617,139)	526,566	6,280	532,846

Loss for the period	-		-	-		(168,821)	(168,821)	(73)	(168,894)
Other comprehensive income (loss):
Adjusted derivatives (hedge accounting), net of taxes		-		-			19,358	-		19,358	-	19,358

Comprehensive income (loss) for the period		-		-			19,358	(168,821)	(149,463)	(73)	(149,536)

BALANCES AS AT JUNE 30, 2019		6,077,674		1,353,937	(268,548)	(6,785,960)	377,103	6,207	383,310

BALANCES AS AT MARCH 31, 2020		6,077,674		1,353,937	(277,132)	(8,167,310)	(1,012,831)	6,177	(1,006,654)

Loss for the period	-		-	-		(281,213)	(281,213)	(78)	(281,291)
Other comprehensive income (loss):
Adjusted derivatives (hedge accounting), net of taxes		-		-			(27,211)	-		(27,211)	-	(27,211)

Comprehensive loss for the period		-		-			(27,211)	(281,213)	(308,424)	(78)	(308,502)

BALANCES AS AT JUNE 30, 2020		6,077,674		1,353,937	(304,343)	(8,448,523)	(1,321,255)	6,099	(1,315,156)

The accompanying notes are an integral part of these interim financial statements.

Biosev S.A.

(Convenience Translation into English from the Original Previously Issued in Portuguese)

STATEMENT OF CASH FLOWS

FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020 (In thousands of Brazilian reais - R$)

Company

Three-month period ended

Consolidated

Three-month period ended

	Note	06.30.20		06.30.19		06.30.20		06.30.19
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period		(281.213)	(168.821)	(281.291)	(168.894)
Non-cash transactions:		-		-		-		-
Depreciation and amortization	23	220.965		236.092	453.749	436.155
Income (loss) from sale of property, plant and equipment	25	56	(504)	(613)	(5.428)
Equity in subsidiaries	13	174.277		153.644	2.936	3.475
Interest, exchange rate changes and inflation adjustments, net		213.162		23.711	488.385	56.974
Exchange, interest rate and commodities risk management		160.966		164.187	135.302	174.662
Recognition of provision for tax, labor, civil and enviromental contingencies		6.142		7.537	27.123	25.506
Recognition (reversal) of estimated losses on doubtful accounts	5	7	389	(231)	590
Income from sale of intangible asset	15	141	-		251	-
Reversal of impairment loss	14	(141)	(376)	(260)	(1.704)
Impairment of assets held for sale	10	(119)	21.060	(119)	21.114
Provision for other losses	25	27	122	3.762	58.740
Recognition (reversal) of allow ance for negative margin and
realization of storeroom inventories	6	10.382	(2.278)	14.139	(1.433)
Losses (gains) on changes in fair value less estimated costs to sell biological assets	22 and 23	(177.049)	(71.508)	(213.829)	(93.397)
Deferred income tax and social contribution	11.2	77.669		106.698	29.770	133.575
Hedge operations		(32.228)	17.145	(41.228)	29.330
Derecognition of operating leases		3.568		-		7.468	-

		376.612		487.098	625.314	669.265
Decrease (increase) in assets:
Trade receivables	5	(33.026)	(54.593)	(245.789)	(171.847)
Inventories	6	(140.301)	(368.101)	402.255	(1.109.780)
Derivative financial instruments	27	132.656		(20.635)	184.420	(29.768)
Escrow deposits	9	2.510		(7.121)	2.300	(6.757)
Recoverable taxes	8	(15.009)	7.613	(18.996)	4.321
Advances to suppliers		(1.004)	(480)	(2.534)	(5.667)
Other receivables		22.303		(25.579)	(15.591)	(4.412)
		(31.871)	(468.896)	306.065	(1.323.910)
Increase (decrease) in liabilities:
Trade payables	17	6.672		(61.352)	(109.713)	(106.401)
Advances from foreign customers		(89.725)	292.211	(919.597)	812.072
Accrued payroll and related taxes		9.389		3.525	19.632	5.861
Taxes payable	18	(288)	(6.402)	(5.887)	(23.743)
Advances from domestic customers		104.503		5.098	112.566	3.792
Payments of labor, civil, tax and environmental contingencies	19	(1.413)	(1.523)	(13.616)	(5.484)
Derivative financial instruments	27.1	(397.899)	(300.134)	(367.922)	(304.709)
Other payables		(33.218)	(30.661)	(35.146)	(40.630)

		(401.979)	(99.238)	(1.319.683)	340.758

Cash used in operating activities, net interest		(57.238)	(81.036)	(388.304)	(313.887)
Interest on borrow ings and financing		(48.854)	(68.514)	(91.124)	(157.889)

Cash used in operating activities		(106.092)	(149.550)	(479.428)	(471.776)
CASH FLOW FROM INVESTING ACTIVITIES
Decrease (increase) in short- and long-term investments	4	(16.577)	18.743	(17.484)	67.830
Decrease (increase) in investments (provision for investment loss)	13	17.472		(27.653)	-		-
Additions to lease agreements	12	(52.406)	(707.460)	(136.139)	(1.617.191)
Increase in property, plant and equipment	14	(59.204)	(37.147)	(117.123)	(95.124)
Additions to biological assets	7	(71.420)	(63.210)	(126.968)	(113.227)
Additions to intangible assets	15	(189)	(5.585)	(190)	(6.475)
Cash used in investing activities		(182.324)	(822.312)	(397.904)	(1.764.187)
CASH FLOW FROM FINANCING ACTIVITIES
Additions to lease operations	12	52.487		707.460	136.170	1.617.191
Payment of lease operations	12	(66.348)	(54.165)	(155.783)	(136.814)
Borrow ings and financing	16	492.784		809.392	859.770	1.912.948
Payment of borrow ings and financing	16	(471.829)	(862.904)	(778.384)	(1.921.867)

Cash provided by financing activities		7.094		599.783	61.773	1.471.458

DECREASE IN CASH AND CASH EQUIVALENTS		(281.322)	(372.079)	(815.559)	(764.505)

Cash and cash equivalents at the beginning of the period	3	396.124		577.523	1.174.943	1.189.112

Cash and cash equivalents at the end of the period	3	114.802		205.444	359.384	424.607
Non-cash items

Transfer of depreciation and amortization to inventories		109.089		46.774	219.442	163.524
Transfer of assets and liabilities to held for sale - Estivas plant		7.506		21.060	7.506	17.609
Acquisition of financed property, plant and equipment		-		22.241	-		49.205
The accompanying notes are an integral part of these interim financial statements.								10

Biosev S.A.

(Convenience Translation into English from the Original Previously Issued in Portuguese)

STATEMENT OF VALUE ADDED

FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2020 (In thousands of Brazilian reais - R$)

						Company			Consolidated
						Three-month period			Three-month period
						ended			ended
			Note		06.30.20			06.30.19			06.30.20			06.30.19
1	- REVENUE			965.225			1.062.551	2.736.124				1.852.699

	1.1)	Sales	22		958.884			1.059.443	2.727.479				1.844.880
	1.2)	Reversal of estimated losses on doubtful accounts	25	(7)	(389)	231				(590)
	1.3)	Other operating income	25	6.348		3.497	8.414				8.409
2	- INPUTS PURCHASED FROM THIRD PARTIES			(392.284)	(530.503)	(1.691.056)				(960.488)

	2.1)	Cost of sales and services			(13.251)	(45.471)	(229.979)				(248.810)
	2.2)	Materials, electric pow er, external services and other		(556.082)	(556.540)	(1.674.906)				(805.075)
	2.3) Gains on changes in fair value of biological assets and other		177.049		71.508	213.829				93.397
3	- GROSS VALUE ADDEED (1-2)			572.941			532.048	1.045.068				892.211

4	- DEPRECIATION AND AMORTIZATION	23		(220.965)	(236.092)	(453.749)				(436.155)
5	- VALUE ADDED CREATED BY THE ENTITY (3-4)			351.976			295.956	591.319				456.056

6	- VALUE ADDED RECEIVED IN TRANSFER			(166.114)	(105.233)	54.951				18.771

	6.1)	Equity in subsidiaries	13		(174.277)	(153.644)	(2.936)				(3.475)
	6.2)	Finance income		8.163		48.411	57.887				22.246

7	- VALUE ADDED FOR DISTRIBUTION (5+6)			185.862			190.723	646.270				474.827

8	- DISTRIBUTION OF VALUE ADDED			185.862			190.723	646.270				474.827

	8.1)	Personnel and payroll taxes	23		53.592			88.229	145.899				153.445

	Direct compensation			33.047			67.120	97.294				106.116
	Benefits		14.783		14.084	35.524				32.262
	Severance pay fund (FGTS)		5.762		7.025	13.081				15.067
	8.2)	Taxes, rates and contributions			99.063			163.552	85.088				257.232

	Federal			82.322			124.396	54.644				185.466
	State		16.724		39.154	30.419				71.752
	Municipal		17	2	25				14
	8.3)	Third-party capital use			314.420			107.763	696.574				233.044

	Rentals			59.708			73.840	152.926				159.797
	Interest and exchange rate changes		254.712		33.923	543.648				73.247
	8.4)	Equity capital			(281.213)	(168.821)	(281.291)				(168.894)

	Loss for the period			(281.213)	(168.821)	(281.291)				(168.894)
The accompanying notes are an integral part of these interim financial statements.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

1. GENERAL INFORMATION

Biosev S.A. ("Company"), a publicly-held company headquartered at Avenida Brigadeiro Faria Lima, 1355, 11º andar, Pinheiros, São Paulo, SP, and its subsidiaries (hereinafter referred to as, collectively, "Group") are mainly engaged in the production, processing and sale of agricultural products, primarily sugarcane and its by-products; the agricultural operations in Company-owned or third-party land; the export, import and sale of petroleum by-products, lubricants, fuel, grease and hydrated ethyl alcohol; the purchase, sale, import and export of agricultural products and its by-products; and the generation and sale of electricity and its by-products.

The Group comprises the activities of Biosev S.A. and Biosev Bioenergia S.A. ("Biosev Bioenergia"), based in Brazil, and Biosev Bioenergia International S.A. ("Biosev Bioenergia International"), based in Switzerland. Additionally, the Group consists of the subsidiaries of such companies, including Biosev Comercializadora S.A., a special-purpose entity established to sell ethanol by-products, sugar and electric power arising from the cogeneration assets of the Santa Elisa and Passa Tempo units, located in the State of São Paulo and State of Mato Grosso do Sul, respectively.

The Group is organized in industrial clusters, composed as follows, with their corresponding branches:

North Ribeirão Preto Agri-Industrial Cluster: Continental (located in the State of São Paulo) and Lagoa da Prata (located in the State of Minas Gerais) plants;
South Ribeirão Preto Agri-Industrial Cluster: Santa Elisa, Leme, Vale do Rosário and MB (Morro Agudo) (located in the State of São Paulo) plants;
Mato Grosso do Sul Agri-Industrial Cluster: Passa Tempo and Rio Brilhante (located in the State of Mato Grosso do Sul) plants.

Biosev S.A. is a company of the Louis Dreyfus Company Group, directly controlled by Hédera Investimentos e Participações Ltda., which holds 79.43% of its shares.

The Company's Management had adopted measures to adjust the debt profile. Specifically, the Company has maintained its strategy to maximize the use of its assets, aligned with strict financial discipline, in order to increase the operational efficiency and the generation of positive free cash flow.

The Company has recorded net losses in the year ended June 30, 2020, mainly by virtue of the negative foreign exchange effects on foreign currency-denominated debts. The Company recorded net losses of R$281,213 as at June 30, 2020. The Company's capacity to continue as a going concern depends on the obtaining of additional capital, renewal and extension of the credit facilities and, finally, generation of profitable transactions. Specifically, the Company's and its subsidiaries' debt levels may significantly impact the business, inclusive in relation to working capital financing and recurring capital disbursements, taking into account the necessary funds to pay the debt service. In addition, out of R$2,292,160, in Consolidated, recorded in current liabilities, in line item "Advances from foreign customers", R$1,732,798 refers to advances to commodities export performance operations with related parties. Moreover, the amount of R$1,743,998, in Consolidated, was recorded in current assets, in line item "Inventories - advances to related-party suppliers". For further information, see Note 20.

Although there is no guarantee that the Company will be able to generate sufficient cash flow to finance the transactions and pay its debt, Management continues to implement actions to improve the operational activities and reduce costs and expenses, in addition to the negotiations in progress with the financial institutions that historically have supported the Company's activities. The Company's Management expects that the improvement actions, current cash balances, favorable liquidity developments and available credit facilities, and results from operations are sufficient to meet the working capital, capital expenses, debt service and other needs for the next year.

Should the Company is not able to generate sufficient cash to conduct the transactions in progress, the Company may need to seek for additional debt financing. The Company may fully or partially refinance its debt, which may be more costly, in addition to all other impacts.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

Covid-19 effects

In connection with the financial statements as at March 31, 2020, the Company continues to comply with all guidelines to prevent Covid-19 disclosed by the proper health bodies and maintain the measures to mitigate the risk of transmission of Covid-19 in work places.

Although the pandemic has not been fully eradicated, the Brazilian authorities began to loosen the restrictions, and the Company believes that the pandemic effects in the global economy has begun to be mitigated. As of the date, the Company has not identified significant effects on its operations; therefore, the Company has maintained the estimated production, sales and delivery of products. The agro industrial sector is deemed an essential activity by virtue of the essential supplies produced to the population, relating to the meal and transportation segments. In addition, there was no change in the measurement of the economic and financial impacts from Covid-19, as disclosed in the financial statements as at March 31, 2020.

2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

2.1 Statement of compliance and basis of preparation

The individual and consolidated interim financial statements have been prepared and is presented in accordance with CPC 21 (R1) - Interim Financial Reporting and IAS 34 - Interim Financial Reporting issued by the International Accounting Standards Board (IASB).

These interim financial statements are presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Interim Financial Information (ITR).

The preparation of the individual and consolidated interim financial statements under CPC 21 (R1) and IAS 34 requires the use of certain critical accounting estimates by the Company's Management. The interim financial statements have been prepared based on the historical cost, except for certain financial instruments, held-for-sale assets and biological assets measured at their fair values. The historical cost is generally based on the fair value of the consideration paid in exchange for assets on the transaction date.

Management undertakes that all relevant information related to the interim financial statements, and only such information, is being highlighted and corresponds to the information used by Management in its management.

The accounting practices and methods of calculating estimates adopted in the interim accounting information are the same as those applied in the preparation of the annual financial statements for the year ended March 31, 2020, filed with the CVM, and therefore should be read together.

2.1.1 New standards, changes and interpretations of standards

CPC 06 (R2)/IFRS 16 - Leases

The aforementioned pronouncement was changed as a result of the granting of benefits related to COVID-19 to tenants under lease agreements. The Company analyzed the content of this pronouncement and did not identify any impacts, since the clauses of the current lease agreements remain unchanged.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

3. CASH AND CASH EQUIVALENTS

CompanyConsolidated

	06.30.20			03.31.20		06.30.20	03.31.20

Cash and banks	28,607	21,625	207,083	364,024
Short-term investments	41,288	3,004	70,792	41,792
Debentures		44,907	371,495	81,508	769,127

		114,802	396,124	359,383	1,174,943

Short- and long-term investments refer to floating rate Certificates of Bank Deposit (CDBs) and/or CDBs indexed at rates ranging from 95% to 96% of the Interbank Deposit Rate (CDI) as at June 30, 2020 (95% to 96% as at March 31, 2020). The CDBs investments are subject to repurchase commitments by the financial institutions issuers and/or custodians.

Debentures not subject to Tax on Financial Transactions (IOF) are issued from local prime financial institutions indexed at rates ranging from 70% to 75% of the CDI rate as at June 30, 2020 (73% to 80% as at March 31, 2020).

4. SHORT- AND LONG-TERM INVESTMENTS

		Company		Consolidated

	06.30.20			03.31.20	06.30.20	03.31.20

Short-term investments	58,701	42,052	69,858	52,245

	58,701	42,052	69,858	52,245

Short- and long-term investments refer to restricted deposits and are operations represented by (i) floating rate Certificates of Bank Deposit (CDBs) and/or CDBs indexed at rates ranging from 70% to 96% of the Interbank Deposit Rate (CDI) as at June 30, 2020 (95% to 96% as at March 31, 2020); (ii) margin deposits in derivative transactions; and (iii) foreign currency- denominated deposits related to prepayments of exports indexed at average rate of 0.10% p.a. performed by subsidiary Biosev Bioenergia Internacional S.A. These deposits may be considered, together with future agricultural production and sugar and ethanol inventories, for purposes of calculation of the indices set forth in the prepaid export agreements.

5. TRADE RECEIVABLES

	Company	Consolidated

	06.30.20		03.31.20		06.30.20	03.31.20

Related parties (Note 20)
In Brazil	12,131	7,498	557		-
Abroad	180,902	133,503	219,167	2,505

	193,033	141,001	219,724	2,505
Third parties
In Brazil	45,858	67,955	109,446	191,167
Abroad	6,153	2,581	133,540	22,570

	52,011	70,536	242,986	213,737

	245,044	211,537	462,710	216,242

(-) Estimated loss for doubtful accounts	(773)		(766)		(13,961)	(14,192)

	244,271	210,771	448,749	202,050

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

The aging list of overdue receivables is as follows:

	Company	Consolidated

	06.30.20		03.31.20		06.30.20	03.31.20

Overdue
Up to 30 days	33,991	24,648	108,765		3,457

31 to 60 days	24,982	2,083	687	6,462
61 to 90 days	1,565	20,887	784	452
91 to 180 days	435	20,455	742	325
Over 180 days	735	17,001	16,186	16,874

	61,708	85,074	127,164		27,570

The change in the estimated loss for doubtful accounts is as follows:

At the beginning of the period/year

Reversal (recognition) of estimated loss for doubtful accounts

CompanyConsolidated

06.30.20			03.31.20		06.30.20	03.31.20
(766)	(175)	(14,192)		(13,395)
	(7)	(591)	231	(797)

		(773)			(766)	(13,961)	(14,192)

6.	INVENTORIES

						Company						Consolidated

		06.30.20		03.31.20				06.30.20			03.31.20

Finished products
Sugar	113,666					4,218		303,235	14,838
Ethanol	207,851					20,676		448,646	79,839
Sugar syrup	1,313					317		2,117	1,241
Other	70					247		258	331
Allow ance for negative inventory margin	(13,767)					(3,298)			(29,833)		(18,985)

		309,133					22,160		724,423	77,264


Raw materials and packaging materials	560					1,033		624	1,166
Storeroom supplies	53,130					37,492		105,961	76,476
Allow ance for realization of storeroom inventories	(4,032)					(4,119)			(10,388)		(7,097)
Advances to suppliers (*)	1,009,820	1,049,084			1,935,205	2,800,824

		1,059,478	1,083,490			2,031,402	2,871,369

		1,368,611	1,105,650			2,755,825	2,948,633

Out of the total amount as at June 30, 2020, R$88.469, in Company, and R$191,207 in Consolidated (R$105.192 and R$223,699 as at March 31, 2020, respectively), refer to advances to sugarcane suppliers that are adjusted on a monthly basis according to the specific conditions and indices set forth in the agreements, and R$921,351, in Company, and R$1,743,998 in Consolidated (R$943,892, in Company, and R$2.577.125, in Consolidated, as at March 31, 2020), refer to advances to export of commodities, as described in Note 20.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

The changes in the allowance for negative inventory margin and realization of storeroom inventories are broken down as follows:

		Company		Consolidated

	06.30.20			03.31.20			06.30.20		03.31.20

Negative inventory margin
Opening balance	(3,298)		(7,410)		(18,985)		(25,793)

Additions	(13,767)		(3,298)		(29,833)		(18,985)
Reversals	3,298	7,410	18,985	25,793

	(13,767)		(3,298)		(29,833)		(18,985)
Realization of storeroom inventories

Opening balance	(4,119)		(3,568)		(7,097)		(5,818)
Additions	(4,032)		(4,119)		(10,388)		(7,097)
Reversals		4,119	3,568	7,097	5,818

		(4,032)		(4,119)		(10,388)		(7,097)

The allowance for negative inventory margin is calculated by analyzing the average production cost of finished products as compared to their realizable value in the market, less costs to sell.

The allowance for realization of storeroom inventories, considering obsolete and slow-moving items, is recognized on a quarterly basis based on inventory management procedure of storeroom inventories duly approved by the Company.

7. BIOLOGICAL ASSETS

Opening balance

Increases arising from expenses on sugarcane crops and crop treatments

CompanyConsolidated

06.30.20 03.31.20 06.30.20 03.31.20

303,621	264,480	663,908	501,124
145,533	430,597	334,089	911,744

449,154	695,077	997,997	1,412,868

Gains (losses) on changes in fair value less estimated costs to sell	177,049	120,821	213,829	222,448
Transfer to assets held for sale	478	(13,682)	478	(13,682)
Sugarcane harvest at fair value in the year/period	(221,781)		(490,374)	(436,020)	(945,620)
Write-off	-		(8,221)	(1,046)	(12,106)

	404,900	303,621	775,238	663,908

The following assumptions were used to determine the fair value:

	Company	Consolidated
	06.30.20		03.31.20		06.30.20	03.31.20

Estimated harvest area (in hectares)	127.949	123.816	227.512	222.421
Expected yields (in ton of sugarcane per hectare)	87,50	85,88	89,80	89,07
Total volume of recoverable sugar (in kilogram per ton of sugarcane)	129,66	126,29	132,07	129,90

Value of a kilogram of total recoverable sugar (in R$) - CONSECANA	0,68	0,66	0,68	0,66
Discount rate	10,21%		10,21%		10,21%	10,21%

As at June 30, 2020, the Company provided as guarantee for the export prepayment 158,608 hectares (158,608 hectares as at March 31, 2020), equivalent to approximately 14,243,087 tons of sugarcane (14,127,348 as at March 31, 2020), at fair value of R$540,451 (R$473,432 as at March 31, 2020). Such prepayment falls due between March 2023 and April 2023.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

8.	RECOVERABLE TAXES

			Company	Consolidated

		06.30.20		03.31.20		06.30.20	03.31.20

State VAT (ICMS)	38,970	39,859	59,283	60,952
Taxes on revenue (PIS and COFINS) (a)	25,081	16,166	85,984	75,050
Witholding Income Tax (IRRF) on short-term investments and	9,929	2,978	65,258	55,466
prepayments

Tax on manufactured products (IPI) and other taxes	2,805	2,773	24,777	24,838

		76,785	61,776	235,302	216,306

Current assets	66,001	50,274	153,299	158,777

Non-current assets		10,784	11,502	82,003	57,529

Refers to taxes on revenues (PIS and COFINS) relating to: (i) Law 10637/02; (ii) Law 10833/03; (iii) Law 11774/200; and (iv) Law 13043/14.

9.	ESCROW DEPOSITS

			Company		Consolidated
		06.30.20			03.31.20			06.30.20	03.31.20
Civil	3,490	3,500	7,770	7,365
Environmental		2,199	2,442	7,290	7,548

			5,689	5,942	15,060	14,913
Tax
	Tax on manufactured products (IPI)	-		-		18,704	18,673
	Income tax (IRPJ) and social contribution (CSLL)	16,273	16,235	33,311	33,262
	ICMS, PIS and COFINS	9,818	9,758	46,025	46,344
	Social security contributions	21,843	21,738	27,546	27,419
	Other	-		-			3,026	3,054

		47,934	47,731	128,612	128,752
Tax
	Labor appeals		136,033	138,493	239,441	241,748

			136,033	138,493	239,441	241,748

			189,656	192,166	383,113	385,413

The changes in the Company's escrow deposits are as follows:

		Company		Consolidated
	06.30.20			03.31.20			06.30.20		03.31.20

Opening balance	192,166	210,108	385,413	367,388
Additions	3,547	31,563	5,700	81,534
Offsets/redemptions		(6,057)		(49,505)		(8,000)		(63,509)

		189,656	192,166	383,113	385,413

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

10. ASSETS AND LIABILITIES HELD FOR SALE

Company and Consolidated

	06.30.20	03.31.20

Assets held for sale	37,777	45,165

	37,777	45,165

The breakdown of assets and liabilities classified as held for sale is as follows:

						Maracaju
	Company and Consolidated		Note			plant	06.30.20	03.31.20

	Assets
Biological assets	7	426		426			904
Fixed assets	14	112,086		112,086			119,114
Impairment losses	14	(74,735)		(74,735)		(74,853)

	Total assets			37,777	37,777	45,165

11. CURRENT AND DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION

11.1 Deferred income tax and social contribution assets and liabilities disclosed in balance sheet

	Company	Consolidated
	06.30.20		03.31.20		06.30.20		03.31.20

Deferred income tax and social contribution assets	345,377	418,029	856,718	872,971
Deferred income tax and social contribution liabilities	-		-		(36,383)	(36,883)

	345,377	418,029	820,335	836,088

11.2 Income tax and social contribution recognized in profit or loss for the period

Results from current income tax and social contribution

Results from deferred income tax and social contribution related to the origin and reversal of temporary differences and tax loss carryforw ards

CompanyConsolidated

06.30.20		06.30.19		06.30.20	06.30.19
6,542	-		8,689	2,783
(77,669)	(106,698)	(29,770)	(133,575)

(71,127)	(106,698)	(21,081)	(130,792)

11.3 Income tax and social contribution recognized in other comprehensive income (loss)

Results from deferred income tax and social contribution recognized in other comprehensive income (loss):

Financial instruments - hedge accounting of futures

Financial instruments - hedge accounting of Sw ap Libor

Financial instruments - hedge accounting of Non-Deliverable Forw ard (NDF) Financial instruments - hedge accounting of exchange differences

CompanyConsolidated

06.30.20		06.30.19		06.30.20		06.30.19
4,146	(722)		16,528	(7,065)
-		-		317	2,110
871		2,935		3,456	6,498
-		-		(6,284)	(11,515)

	5,017	2,213	14,017	(9,972)

Effects on subsidiaries	9,000	(12,185)	-		-

	14,017	(9,972)	14,017	(9,972)

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

11.4 Reconciliation of income tax and social contribution expenses at statutory and effective rates

		Company	Consolidated
		06.30.20				06.30.19			06.30.20	06.30.19

Results before taxation	(210.086)			(62.123)			(260.210)		(38.102)
Statutory rate	34%		34%		34%		34%


Income from income tax and social contribution at statutory rate	71.429		21.122		88.471		12.955
Equity in subsidiaries	(59.254)			(52.239)			(998)		(1.182)
Unrecognized deferred income tax and social contribution credits	(76.031)			(76.751)			(104.180)		(135.669)
Tax revenue (grants)	4.422		9.124		4.422		9.124
Rate difference of foreign subsidiary	-			-			6.088	97
Subcapitalization rules	(7.750)			(5.739)			(14.326)		(15.208)
Other	(3.943)			(2.215)			(558)		(909)

Income from income tax and social contribution at effective rate	(71.127)			(106.698)			(21.081)		(130.792)

11.5 Balances of deferred income tax and social contribution assets and liabilities

						Recognized in			Recognized in other		Closing
		Opening balance			profit or loss for			comprehensive		balance as at
Company		as at 03.31.20			the period			income (loss)	06.30.20
Temporary differences:
Provision for tax, labor, civil and environmental contingencies	37,028		1,608	-		38,636
Adjustment at fair value of biological assets	(16,585)	(52,306)	-		(68,891)
Other receivables (AVP)	14,162		(914)					13,248
Hedge accounting of Libor sw ap, NDF and exchange rate changes	63,527		14,967	5,017	83,511

Unrealized exchange rate changes	412,077		30,438	-		442,515
Amortization of tax goodw ill	(245,277)	-	-		(245,277)
Accelerated depreciation	(39,048)	(11,144)					(50,192)
Impairment of fixed assets	65,310		(88)	-		65,222
Mark-to-market of derivatives	2,363		(55,618)	-		(53,255)
Impairment of assets held for sales	10,859		40					10,899

Other		11,661			(4,652)	-		7,009

		316,077			(77,669)	5,017	243,425

Unutilized tax losses and credits
Tax loss carryforw ards	74,616		-	-		74,616
Social contribution tax loss carryforw ards		27,336			-		-			27,336

		418,029			(77,669)		5,017		345,377

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

			Recognized in	Recognized in other	Closing
	Opening balance	profit or loss for	comprehensive	balance as at
Company	as at 03.31.19	the period	income (loss)	06.30.19
Temporary differences:
Provision for tax, labor, civil and environmental contingencies	47,227		2,045		-		49,272
Adjustment at fair value of biological assets	(15,389)		(18,165)		-		(33,554)
Other receivables (AVP)	1,795		(139)		-		1,656
Hedge accounting of Libor sw ap, NDF and exchange rate changes	7,817		3,111		2,213		13,141

Unrealized exchange rate changes	209,867		(36,712)		-		173,155
Amortization of tax goodw ill	(245,277)		-		-		(245,277)
Accelerated depreciation	(25,179)		(8,522)		-		(33,701)
Impairment	65,746		(59)		-		65,687
Mark-to-market of derivatives	(16,095)		(52,561)		-		(68,656)
Impairment of assets held for sales	18,003		7,160		-		25,163
Other	26,074		(2,856)		-		23,218

	74,589		(106,698)		2,213		(29,896)

Unutilized tax losses and credits
Tax loss carryforw ards	74,616		-		-		74,616
Social contribution tax loss carryforw ards	27,336		-		-		27,336

	176,541		(106,698)		2,213		72,056


			Recognized in	Recognized in other	Closing
	Opening balance	profit or loss for	comprehensive	balance as at
Consolidated	as at 03.31.20	the period	income (loss)	06.30.20
Temporary differences:
Provision for tax, labor, civil and environmental contingencies	100,468	4,592	-		105,060
Adjustment at fair value of biological assets	(71,630)		(67,396)		-		(139,026)
Other receivables (AVP)	14,162	(914)		-		13,248
Hedge accounting of Libor sw ap, NDF and exchange rate changes	159,955	-		14,017	173,972
Unrealized exchange rate changes	827,139	75,456	-		902,595
Amortization of tax goodw ill	(245,277)		-		-		(245,277)
Accelerated depreciation	(39,048)		(11,144)		-		(50,192)
Mark-to-market of derivatives	(10,244)		(31,121)		-		(41,365)
Impairment of property, plant and equipment	76,443	(127)		-		76,316
Appreciation of acquired assets	(231,020)		3,530	-		(227,490)
Impairment of fixed assets	906	-		-		906
Fair value of financial debts	1,161	(1,161)		-		-
Leases	35,367	205			-		35,572
Other	60,563	(2,618)		-		57,945

	678,945	(30,698)		14,017	662,264
Unutilized tax losses and credits
Tax loss carryforw ards	115,532	682	-		116,214
Social contribution tax loss carryforw ards	41,611	246	-		41,857

	836,088	(29,770)		14,017	820,335

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

			Recognized in		Recognizd in other		Closing
	Opening balance		profit or loss for		comprehensive		balance as at
Consolidated	as at 03.31.19		the period		income (loss)	06.30.19
Temporary differences:
Provision for tax, labor, civil and environmental contingencies	97,941	6,807	-	104,748
Adjustment at fair value of biological assets	(32,728)	(36,955)	-	(69,683)
Hedge accounting of Libor sw ap, NDF and exchange rate changes	165,790	-	(9,972)	155,818
Amortization of tax goodw ill	(245,277)	-	-	(245,277)
Accelerated depreciation	(25,179)	(8,522)	-	(33,701)
Mark-to-market of derivatives	(82,228)	(44,447)	-	(126,675)
Appreciation of acquired assets	(253,050)	4,537	-	(248,513)
Impairment of fixed assets	18,896	7,173	-	26,069
Fair value of financial debts	1,161	-	-	1,161
Other	50,545	18,616	-	69,161

	214,231	(133,575)	(9,972)	70,684
Unutilized tax losses and credits
Tax loss carryforw ards	109,760	-	-	109,760
Social contribution tax loss carryforw ards	40,819	-	-	40,819

	364,810	(133,575)	(9,972)	221,263

As at June 30, 2020, the Company has tax loss carryforwards in the amount of R$3,339,156, in Company, and R$6,676,225 in Consolidated (R$3,115,535 and R$6,369,813 as at March 31, 2020, respectively) for which no deferred income tax and social contribution assets have been recognized.

12. LEASES

12.1 Asset use right in leases

This line item includes the amounts that correspond to the right to use the current agreements; the amount is equivalent to the present value of the obligations assumed with the counterparties. These agreements are payable on the respective maturity dates (between 1 and 13 years).

The changes for the period are broken down as follows:

										Company
															Agricultural
		Equipment		Land		Buildings			Vehicles		partnerships			Total

03.31.20	121,329			134,947			1,533		2,488			440,009	700,306
Additions/adjustments	2,666			11,605			-		-			38,135	52,406
Derecognition	(3,568)		-			-		-			-		(3,568)
Amortization	(13,207)		(6,811)		(256)	(589)		(27,952)	(48,815)

06.30.20	107,220	139,741	1,277	1,899	450,192	700,329


										Company
															Agricultural
		Equipment		Land		Buildings			Vehicles		partnerships			Total

03.31.19
Initial adoption on April 1, 2019	142,669			112,768			2,554		4,845			393,697	656,533
Additions/adjustments	55,367			50,499			-		-			143,509	249,375
Derecognition	(19,991)		-			-		-			-		(19,991)
Amortization	(56,716)		(28,320)		(1,021)	(2,357)		(97,197)	(185,611)

03.31.20		121,329	134,947	1,533	2,488	440,009	700,306

																21

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

									Consolidated
														Agricultural
		Equipment		Land	Buildings			Vehicles		partnerships			Total

03.31.20	254,249			137,257			1,533		5,174			1,179,166	1,577,379
Additions/adjustments	21,084			11,664			-		-			103,391	136,139
Derecognition	(7,468)		-			-		-			-		(7,468)
Amortization	(28,178)		(7,178)		(256)	(1,225)		(80,651)	(117,488)

06.30.20	239,687	141,743	1,277	3,949	1,201,906	1,588,562

									Consolidated
														Agricultural
		Equipment		Land	Buildings			Vehicles		partnerships			Total

03.31.19
Initial adoption on April 1, 2019	296,896			115,195			2,554		10,075			1,068,666	1,493,386
Additions/adjustments	118,960			51,556			-		-			425,349	595,865
Derecognition	(34,675)		-			-		-			-		(34,675)
Amortization	(126,932)		(29,494)		(1,021)	(4,901)		(314,849)	(477,197)

03.31.20	254,249	137,257	1,533	5,174	1,179,166	1,577,379

12.2 Lease liabilities

Lease liabilities refer to future payments stated to present value at the discount rate, subject to possible effects from recoverable taxes (PIS and COFINS).

The incremental interest rate of the lease liability varies between 6.36% and 11.25% per year.

The changes for the period are broken down as follows:

		Company			Consolidated

	06.30.20		03.31.20		06.30.20		03.31.20

Present value of liability		732,385			732,114	1,693,183	1,681,269

		732,385			732,114	1,693,183	1,681,269

Classification:
Current	200,569		215,257	477,464	498,932

Non-current	531,816		516,857	1,215,719	1,182,337

Total	732,385		732,114	1,693,183	1,681,269


		Company			Consolidated

	06.30.20		03.31.20		06.30.20		03.31.20

Opening balance	732,114		656,533	1,681,269	1,493,386
Additions	52,487		249,605	136,170	596,011
Derecognition	-		(4,065)	-		(6,065)
Payments	(66,348)	(221,208)	(155,783)	(521,309)
Financial charges	14,132		51,249	31,527	119,246

Closing balance	732,385		732,114	1,693,183	1,681,269

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

The future payments are broken down as follows:

	Company		Consolidated
	06.30.20	03.31.20	06.30.20	03.31.20

Up to 1 year	200,569	215,257	477,464	498,932
Up to 2 years	157,929	161,243	367,714	365,273
Up to 3 years	111,791	109,793	269,040	260,574
Up to 4 years	89,650	87,311	216,082	210,009
Up to 5 years	95,423	86,462	214,338	193,298
Above 5 years	77,023	72,048	148,545	153,183

	732,385	732,114	1,693,183	1,681,269

13. INVESTMENTS (PROVISION FOR INVESTMENT LOSS)

		Company	Consolidated
		06.30.20		03.31.20				06.30.20	03.31.20

Investments in subsidiaries and jointly-controlled subsidiaries	1,262,450		1,237,960				154,955		157,891
Other investments	2,502		2,502			2,502		2,502

Investments	1,264,952		1,240,462			157,457		160,393

Provision for investment loss	(1,467,473)	(1,251,234)			-		-

a) Interest in subsidiaries and jointly-controlled entities

					Company				Consolidated
		Biosev	Biosev Bioenergia	Biosev
		Bioenergia S.A.		International S.A.	Comercializadora S.A.		TEAG
Capital	2,985,044	175	14,365		44,701
Profit (loss) for the period	(198,768)		30,430	(5,939)		(1,671)
Equity	(1,466,362)		356,444	561		36,939
Elimination of gains on the sale of property, plant and equipment w ith related parties	(1,111)		-		-		-

Shareholding interest	100%		100%		100%		50%
Value of investments in subsidiaries under equity method		(1,467,473)		356,444		561		18,470

Goodw ill/realization of concession value, net		494,079	-		-		136,485

Elimination of gains on the sale of property, plant and equipment w ith related parties		-		-		-		-
Investments	(973,394)		356,444	561		154,955

Provision for investment loss		(1,467,473)		-		-		-

Equity pick up in subsidiaries		(198,768)		30,430	(5,939)		(835)

b) Changes in investments in subsidiaries, jointly-controlled entities and non-controlled entities

								Company
										Goodw ill
						Biosev
			Biosev	Bioenergia	Biosev	Tavares de
		Bioenergia S.A.	International S.A.	Comercializadora S.A.	Melo (*)	Ampla (*)	Other	06.30.20			03.31.20
Opening balance	(1.251.233)		326.014	6.500		-		-		2.502	(916.217)		(85.938)
Capital increase	-		-		-		-		-		-		-		4.000
Equity pick up in subsidiaries	(198.768)		30.430	(5.939)		-		-		-		(174.277)		(1.109.447)
Other comprehensive income	(17.472)		-		-		-		-		-		(17.472)		274.249
Other	-		-		-		-		-		-		-		919

Value of investments in subsidiaries under equity method	(1.467.473)		356.444	561		-		-		2.502	(1.107.966)		(916.217)

Goodw ill	494.079	-		-		407.675	3.691	-		905.445	905.445

Value of investments		494.079	356.444	561		407.675	3.691	2.502	1.264.952	1.240.461

Provision for investment loss		(1.467.473)		-		-		-		-		-		(1.467.473)		(1.251.233)

(*) Companies merged in prior years.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

				Consolidated
		TEAG	Other	06.30.20		03.31.20

Opening balance	157,891	2,502		160,393	169,913
Equity pick up in subsidiaries	(2,936)	-		(2,936)	(8,952)
Profit (loss)	(835)	-		(835)	(553)
Realization of concession value, net	(2,101)	-		(2,101)	(8,399)

Other comprehensive loss	-	-		-	-

Value of investments	154,955	2,502		157,457	160,393

c) Investments in jointly-controlled entities

The balances of the balance sheet and statement of operations of the company are broken down as follows:

				TEAG
			06.30.20			03.31.20

Balance sheet
Assets
Total current assets	44,122				47,820
Long-term receivables	3,525				3,032
Property, plant and equipment and intangible assets	123,710				124,014
Total non-current assets	127,235				127,046

Total assets		171,357			174,866
Liabilities
Total current liabilities	17,370				18,286
Total non-current liabilities	117,048				117,970
Equity
Total equity	36,939				38,610

Total liabilities and equity		171,357			174,866

						TEAG

			06.30.20		03.31.20

Statement of operations
Net revenue	13,433	52,971
Operating expenses
General, administrative and selling expenses	(14,796)	(51,652)
Other operating income		103	4,541

Operating income (loss) before finance income (costs)		(1,261)	5,860
Finance income (costs), net		(1,294)	(7,529)

Loss before taxation		(2,555)	(1,669)
Income tax and social contribution		884	563

Loss for the period		(1,671)	(1,106)

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

14. PROPERTY, PLANT AND EQUIPMENT

										Company
						06.30.20									03.31.20

						Accumulated								Accumulated
				Cost	depreciation		Net			Cost	depreciation		Net

Land	15,095		-		15,095		15,095		-		15,095
Buildings	260,119		(93,531)	166,588		259,775		(92,431)	167,344
Improvements	25,588		(13,714)	11,874		25,587		(13,501)	12,086
Facilities	354,151		(211,251)	142,900		351,848		(208,192)	143,656
Furniture and fixtures	12,259		(8,334)	3,925		12,186		(8,193)	3,993
IT equipment	30,951		(28,930)	2,021		30,927		(28,672)	2,255
Machinery and equipment (*)	2,256,539		(1,451,286)	805,253		2,246,767		(1,388,282)	858,485
Vehicles	10,586		(8,669)	1,917		10,615		(8,567)	2,048
Agricultural machinery and implements (**)	962,828		(850,387)	112,441		960,728		(805,016)	155,712
Bearer plant	1,677,662		(1,410,218)	267,444		1,627,300		(1,366,804)	260,496

			5,605,778		(4,076,320)	1,529,458		5,540,828		(3,919,658)	1,621,170

Construction in progress (Note 14.1)	12,723		-		12,723		14,263		-		14,263

			5,618,501		(4,076,320)	1,542,181		5,555,091		(3,919,658)	1,635,433


										Consolidated
						06.30.20									03.31.20

						Accumulated								Accumulated
				Cost	depreciation		Net			Cost	depreciation		Net

Land		21,084		-		21,084		21,084		-		21,084
Buildings	477,944		(187,251)	290,693		475,559		(184,730)	290,829
Improvements		129,166		(61,142)	68,024		128,777		(60,118)	68,659
Facilities	555,011		(326,644)	228,367		545,312		(320,850)	224,462
Furniture and fixtures		20,940		(14,659)	6,281		20,731		(14,443)	6,288
IT equipment	61,358		(53,972)	7,386		60,607		(53,128)	7,479
Machinery and equipment (*)		5,646,155		(3,808,881)	1,837,274		5,595,046		(3,657,614)	1,937,432
Vehicles	35,177		(34,195)	982		35,459		(34,121)	1,338
Agricultural machinery and inputs (**)	1,736,989		(1,515,141)	221,848		1,734,333		(1,426,694)	307,639
Bearer plant		3,065,723			(2,505,707)	560,016		2,966,966		(2,427,778)	539,188

				11,749,547			(8,507,592)	3,241,955		11,583,874		(8,179,476)	3,404,398

Construction in progress (Note 14.1)	24,750		-		24,750		72,993		-		72,993

			11,774,297		(8,507,592)	3,266,705		11,656,867		(8,179,476)	3,477,391

Includes deferred manufacturing costs. (**) Includes deferred agricultural costs.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

The changes in the net value of property, plant and equipment are as follows:

		Company		Consolidated
	06.30.20		03.31.20		06.30.20	03.31.20

Opening balance	1,635,433	1,697,433		3,477,391	3,641,525
Acquisitions and additions	55,671	378,970		110,768	793,991
Residual value of w rite-offs	(16)		(53,726)		(606)	(58,913)
Transfer to assets held for sale	7,028	19,312	7,028	22,818
losses (*)	-		706	9	522
Depreciation for the period/year	(155,935)		(407,262)		(327,885)	(922,552)

	1,542,181	1,635,433		3,266,705	3,477,391

(*) See Note 14.3.

14.1 Construction in progress

Construction in progress is broken down by plant as follows:

The balance of construction in progress refers basically to the adaptation of industrial facilities, increase in sugar production and refurbishment of administrative facilities.

14.2 Fixed assets given in guarantee and commitments for acquisition of fixed assets

As at June 30, 2020, the Company had agreements with suppliers for acquisition of fixed assets, amounting to R$19,041 (R$21,607 as at March 31, 2020), and total fixed assets given in guarantee in the amount of R$1,102,876 (R$809,362 as at March 31, 2020).

14.3 Impairment

As at June 30, 2020, the reversal/impairment totaled R$9 in Consolidated (R$706, in Company, and R$522, in Consolidated, as at March 31, 2020), due the sales and/or transfers of fixed assets between industrial clusters of the Group.

As at June 30, 2020, the accumulated balance of impairment is R$61,491, in Company, and R$190,952 in Consolidated (R$61,491 and R$190,961 as at March 31, 2020, respectively).

The main impaired assets comprise land, buildings, furniture and fixtures, computers, machinery and equipment, vehicles, and agricultural machinery and implements.

15. INTANGIBLE ASSETS

	Company	Consolidated
	06.30.20		03.31.20		06.30.20		03.31.20

Goodw ill
Biosev Bioenergia	-		-		494,079	494,079
Usinas Tavares de Melo	-		-		407,675	407,675
Ampla	-		-		3,691	3,691

	-		-		905,445	905,445
Softw are

Licenses	10,456	11,856	11,475	12,997

	10,456	11,856	11,475	12,997

Other	-		-		3,218	3,522

	-		-		3,218	3,522

	10,456	11,856	920,138	921,964

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

The changes in intangible assets are as follows:

						Company
											Reversal
		03.31.20		Additions	Write-off	Amortization		Impairment	06.30.20

Softw are
Licences	11,856	189	(141)		(1,589)	141	10,456

		11,856	189	(141)		(1,589)	141	10,456

				Company
		03.31.19		Additions	Amortization	06.30.19

Softw are
Licences	9,126	5,585	(1,463)		13,248

		9,126	5,585	(1,463)		13,248

						Consolidated
											Reversal
		03.31.20		Additions	Write-off	Amortization		Impairment	06.30.20

Goodw ill

Biosev Bioenergia	494,079		-		-			-	-	494,079
Usinas Tavares de Melo	407,675		-		-			-	-	407,675
Ampla	3,691		-		-			-	-	3,691
Softw are
Licences	12,997		190	(251)		(1,712)	251	11,475
Other
Other	3,522		-		-			(304)	-	3,218

		921,964		190	(251)		(2,016)	251	920,138

			Consolidated
	03.31.19		Additions	Amortization	06.30.19

Goodw ill
Biosev Bioenergia	494,079	-		-			494,079
Usinas Tavares de Melo	407,675	-		-			407,675
Ampla	3,691	-		-			3,691
Softw are
Licences	9,726	6,475	(1,615)		14,586
Other
Other	4,489	-		(424)		4,065

	919,660	6,475	(2,039)		924,096

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

16. BORROWINGS AND FINANCING

Company

Weighted average financial

Description

Advance on Foreign Exchange Contract (ACC)

(a)

Export Prepayment - PPE (a)

Constitutional Fund to Finance the the Midw est -

FCO

Finame

Export Credit Note and Bill - NCE

Offshore Loan (a)

Currency	charges		Maturity (*)		Collaterals		06.30.20	03.31.20
US$	Exchange rate change plus average		As at 03.31.23	Guarantee and promissory note	1,766,953	1,625,953
interest rate of 5.37% p.a.

US$	Exchange rate change plus Libor		As at 03.25.23	Promissory note, receivables and	725,973	680,727
plus average interest rate of 4% p.a.		collateral
R$	Interest of 10% p.a.		As at 12.01.23	Guarantee, conditional sale and	48,410	51,868
	receivables

R$	Average interest rate of 9.38% p.a.		From 04.17.23 to	Conditional sale, guarantee and	33,947	38,370
and TLP + 4.92% p.a.	04.15.25	promissory note

R$	CDI plus average interest rate of 2%		As at 04.29.22	Guarantee, promissory note and collateral	181,082	181,212
	Exchange rate change plus Libor
US$	plus average interest rate of 5.75%		As at 10.15.27	Mortgage, credit rights and collateral	275,789	285,479
	p.a.

Bank Credit Note - CCB	R$	CDI plus average interest rate of 2% As at 03.30.23	Collection and assignment of receivables
			Current liabilities
			Non-current liabilities

			Weighted average financial
Description	Currency		charges			Maturity (*)		Collaterals
							Guarantee, receivables, mortgage and
Restructured debt (ex-Debentures) - R$	R$	CDI plus 1.72% p.a.		As at 07.10.24
	shares

		Exchange rate change plus Libor			Guarantee, receivables, mortgage and
Restructured debt - US$	US$	plus average interest rate of 2.47%		As at 07.10.23
	shares
		p.a.

Restructured debt (debenture) - R$ (a)	R$	CDI plus 1.72% p.a.		As at 07.10.24	Guarantee, receivables, mortgage and
	shares

139,157 139,434

3,171,311 3,003,043

421,054 2,935,559

2,750,25767,484

Consolidated

06.30.20 03.31.20

100,925 99,771

789,201 741,176

142,420 140,590

Advance on Foreign Exchange Contract - ACC	US$
(a)

Export Prepayment - PPE (a)/(b)	US$
Constitutional Fund to Finance the Midw est - FCO	R$
Finame	R$
Export Credit Note and Bill - NCE	R$
Offshore Loan (a)	US$
Bank Credit Note - CCB	R$

Exchange rate change plus average	As at 03.31.23	Guarantee and promissory note
interest rate of 5.40% p.a.

Exchange rate change plus Libor	From 03.25.2023	Guarantee, promissory note,receivables
plus average interest rate of 5.64%
to 04.30.23	and collateral
p.a.

Interest of 10% p.a.	As at 12.01.23	Guarantee, conditional sale and
receivables

Average interest rate of 9.55% p.a.	From 04.15.21 to	Conditional sale, guarantee and
and TLP + 4.92% p.a.	04.15.25	promissory note
CDI plus average interest rate of 2.%	As at 04.29.22	Guarantee, promissory note and collateral
p.a.
Exchange rate change plus Libor
plus average interest rate of 5.75%	As at 10.15.27	Mortgage, credit rights and collateral
p.a.
CDI plus average interest rate of 2%	As at 03.30.23	Collection and assignment of receivables
p.a.

3,839,390 3,642,512

2,178,176 1,962,581

48,410 51,868

67,358 76,802

181,082 181,212

275,789 285,479

139,157 139,434

7,761,908 7,321,425

Current liabilities

Non-current liabilities

(*) Refers to the last maturity date of the agreements.

1,168,611 7,225,234

6,593,29796,191

Net of commission costs and deferred expenses, in the amount of R$2,758, in Company, and R$8,934, in Consolidated, as at June 30, 2020 (R$2,755, in Company, and R$8,843, in Consolidated, as at March 31, 2020), monthly recorded in profit or loss through the maturity of such transaction.
Include export prepayments, contracted on January 9, 2015, by subsidiary Biosev Bioenergia International S.A. with the trade union of foreign financial institutions, in the amount of R$1,210,605 as at June 30, 2020 (R$1,150,301 as at March 31, 2020). These operations are collateralized by a set of assets for settlement. As at June 30, 2020, the foreign currency- denominated deposits comprise, together with the agricultural production (sugarcane) of specific units and sugar and ethanol inventories, the ratio of 115.66% of the obligations.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

Non-current liabilities mature as follows (crop year):

		Company		Consolidated

	06.30.20			06.30.20

July 2021 to March 2022	1,019,395		2,673,689
April 2022 to March 2023	1,524,316		3,377,486
April 2023 to March 2024	53,062		378,721
April 2024 to March 2025	41,990		48,828
April 2025 to October 2027	111,494		114,573
	2,750,257		6,593,297

The verification of compliance with the restrictive clauses occurs annually, on the balance sheet date. On March 31, 2020, the Company did not reach certain indicators established for financial covenants, however the Company obtained a waiver from its financial creditors for contracts subject to the compliance with such indicators, being exempted from complying with the financial covenants not reached, maintaining the original maturity dates.

16.1 Changes in borrowings and financing

Opening balance

Additions

Payment of principal

Interest, exchange rate changes and inflation adjustments and adjustment to fair value of loans, net

Company	Consolidated
06.30.20		03.31.20			06.30.20	03.31.20
3,003,043	2,508,176		7,321,425	5,979,328
492,784	1,840,335		859,770	4,459,444
(475,322)	(1,961,531)		(785,958)	(4,733,209)
198,543	825,313		455,673	2,080,661

Payment of interest	(47,737)	(209,250)	(89,002)	(464,799)

Closing balance	3,171,311		3,003,043	7,761,908	7,321,425

17. TRADE PAYABLES

	Company	Consolidated
	06.30.20		03.31.20		06.30.20	03.31.20

Related parties (Note 20)
In Brazil	3,919	6,068	5,049	8,001
Abroad	98,382	89,808	5,169	4,494

	102,301	95,876	10,218	12,495

Third parties
In Brazil	218,954	215,843	623,669	662,534
Abroad	176	3,118	61,138	129,839

	219,130	218,961	684,807	792,373

	321,431	314,837	695,025	804,868

Current liabilities	316,809	309,104	690,168	798,903

Non-current liabilities	4,622	5,733	4,857	5,965

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

18. TAXES PAYABLE

	Company	Consolidated
	06.30.20		03.31.20		06.30.20		03.31.20

Payment in installments	79	125	2,099	2,137
Tax on manufactured products (IPI)	-		-		569	1,027
State VAT (ICMS)	3,408	6,916	3,408	8,152
Taxes on revenue (PIS and COFINS)	601	314	1,583	4,979
Social Security Tax (INSS)	9,064	3,867	21,209	11,083
Income tax (IRPJ) and social contribution (CSLL)	598	3,378	32,798	40,299
Withholding Income Tax (IRPF)	12,660	12,660	12,660	12,660
Other	13,117	12,555	13,440	13,316

	39,527	39,815	87,766	93,653

Current liabilities	21,203	21,314	69,442	75,152

Non-current liabilities	18,324	18,501	18,324	18,501

19. PROVISION FOR TAX, LABOR, CIVIL AND ENVIRONMENTAL CONTINGENCIES

The Company is a party to various ongoing lawsuits involving tax, labor, civil and environmental matters arising in the normal course of business.

							Company
					Inflation				Written-off	Written-off
		03.31.20		adjustment		Additions		reversals	payments	06.30.20

Tax
Income tax (IRPJ) and social contribution (CSLL)	78	-	-	-	-	78

		78		-	-	-	-	78

Labor	84,919	1,966	6,756	(2,909)	(1,413)	89,319
Environmental	1,696	(111)	326	(263)	-	1,648
Civil	20,783	374	290	(301)	-	21,146
Criminal	605	14	-	-	-	619

			108,003		2,243	7,372	(3,473)	(1,413)	112,732

			108,081		2,243	7,372	(3,473)	(1,413)	112,810


							Company
					Inflation				Written-off	Written-off
		03.31.19		adjustment		Additions		reversals	payments	06.30.19

Tax
Income tax (IRPJ) and social contribution (CSLL)	76	1	-	-	-	77

		76		1	-	-	-	77

Labor	128,197	(56)	11,148	(9,282)	(1,523)	128,484
Environmental		1,468		210	3	(73)	-	1,608
Civil	8,338	1,075	5,027	(516)	-	13,924

		138,003		1,229	16,178	(9,871)	(1,523)	144,016

		138,079		1,230	16,178	(9,871)	(1,523)	144,093

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

														Consolidated
									Inflation							Written-off			Written-off
		03.31.20					adjustment			Additions			reversals			payments	06.30.20

Tax
IPI levied on sugar sales	17,785			33		-		-		-				17,818
PIS and COFINS	3,406			-			-		-		-				3,406
Income tax (IRPJ) and social contribution (CSLL)	2,852			-			-		-		-						2,852

Other		16			-			-		-		-				16

			24,059			33		-		-		-				24,092


Labor	227,868			3,714		23,933	(2,145)	(13,616)			239,754
Environmental	11,354			1,011		877	(304)	-				12,938
Civil	30,782			93		524	(627)	-				30,772
Criminal		605			14		-		-		-				619

			270,609			4,832		25,334	(3,076)	(13,616)			284,083

		294,668			4,865		25,334	(3,076)	(13,616)			308,175

														Consolidated
									Inflation							Written-off			Written-off
		03.31.19					adjustment			Additions			reversals			payments		06.30.19

Tax
IPI levied on sugar sales		17,584			57		-		-		-				17,641
PIS and COFINS	3,406			-			-		-		-				3,406
Income tax (IRPJ) and social contribution (CSLL)	2,850			1		-		-		-					2,851
Other		16			-			-		-		-				16

			23,856			58		-		-		-				23,914

Labor		236,368			2,514		31,176	(14,686)	(5,484)			249,888
Environmental	7,611			385		3	(474)	-				7,525
Civil		19,402			1,695		5,943	(1,108)	-				25,932

			263,381			4,594		37,122	(16,268)	(5,484)			283,345

			287,237			4,652		37,122	(16,268)	(5,484)			307,259

Contingencies - court or out-of-court claims classified as possible losses and not accrued

Tax

The tax claims (court and out-of-court) as at June 30, 2020, with an acknowledged possible likelihood of loss and not accrued are shown in the table below:

		Company		Consolidated
	06.30.20			03.31.20		06.30.20	03.31.20

Tax		754,719	725,832	1,691,450	1,652,707

		754,719	725,832	1,691,450	1,652,707

Among the contingencies for which a provision has not been recognized and that have been assessed as possible loss is the collection of ICMS due to an alleged difference identified in inventories. Additionally, there is a discussion also involving ICMS on the reasonableness in levying ICMS on export of semi-finished products.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

Civil, environmental and labor

The civil, environmental and labor claims (court and out-of-court) as at June 30, 2020, with an acknowledged possible likelihood of loss and not accrued are shown in the table below:

		Company		Consolidated
	06.30.20			03.31.20		06.30.20	03.31.20

Civil	107,919	101,979	154,668	147,405
Environmental	11,257	12,278	73,754	74,433
Labor		73,117	76,297	124,949	126,742

		192,294	190,554	353,371	348,580

As at June 30, 2020, the Group was a party to labor, environmental and civil lawsuits whose likelihood of loss is considered possible based on the opinion of Group's legal counsel.

Labor claims are substantially related to (i) working hours; (ii) time in transit; (iii) additional premiums; (iv) refund of deductions, such as trade union fees; (v) contractual exclusivity; (vi) jointly-liability with service providers; (vii) occupational accidents and/or hazards/diseases; (viii) organizational climate; (ix) validity of the collective bargaining agreement, and (x) compensation costs in relation to the items mentioned above.

Civil lawsuits basically refer to discussions involving contractual issues and occupational and/or traffic accidents, collection, possession issues and general indemnities.

Environmental lawsuits are substantially related to: (i) burn of sugarcane straw; and (ii) alleged non-authorized intervention or damages in an area considered by environmental authorities as a permanent preservation area.

20. RELATED PARTIES

The information on related-party transactions has not significantly changed compared to the information disclosed in the financial statements as at March 31, 2020.

The related-party transactions described in the tables below refer basically to: (i) sales in the domestic and international markets at the price agreed between the parties, based on the market quotation; (ii) loan transactions; (iii) apportionment of costs relating to the shared facilities; (iv) provision of brokerage services involving derivative transactions; (v) commodities export performance operations; and (vi) lifting and sugar storage services.

The tables below show the balances and transactions as at June 30, 2020 between the Company and its subsidiaries, which are consolidated in its balance sheet:

							Company
							Assets

Subsidiaries		Trade receivables			Loan				Total
Biosev Bioenergia International S.A.	164,675		-			164,675
Biosev Bioenergia S.A.	10,399	-			10,399
Biosev Comercializadora S.A.	1,223	-			1,223

06.30.20		176,297		-			176,297

Biosev Bioenergia International S.A.	132,489		-			132,489
Biosev Bioenergia S.A.	4,164	26,736		30,900
Biosev Comercializadora S.A.		3,334	-			3,334

03.31.20			139,987			26,736		166,723

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

						Company
						Liabilities

Subsidiaries				Advances from
	Trade payables (*)		customers (**)		Loan (**)		Total

Biosev Bioenergia International S.A.	101,607		870,768			-		972,375
Biosev Bioenergia S.A.	2,554	-				939	3,493
Biosev Comercializadora S.A.	496	-				-		496
Sociedade Operadora Portuária de São Paulo S/A		-			-				14,196	14,196

06.30.20			104,657			870,768			15,135	990,560


Biosev Bioenergia International S.A.	95,932	814,736			-		910,668
Biosev Bioenergia S.A.	4,134	-				-		4,134
Sociedade Operadora Portuária de São Paulo S/A		-			-				14,108	14,108

03.31.20			100,066			814,736			14,108	928,910

As at June 30, 2020, the amount of R$3,225 (R$3,062 as at March 31, 2020) was recorded in current liabilities, in line item "Other payables".
(**) As at June 30, 2020, the amounts of R$25,457 (R$12,231 as at March 31, 2020) and R$845,311 (R$802,505 as at March 31, 2020) were recorded in current liabilities and non-current liabilities, respectively.

											Company
											Profit (loss)
							Income								Expenses
Subsidiaries			Sales			Interest			Total	Purchases		Interest	Total

Biosev Bioenergia International S.A.	138,314	-		138,314		(546)		(68,621)				(69,167)
Biosev Bioenergia S.A.	22,619	-		22,619		(176)		(84)				(260)
Biosev Comercializadora S.A.	4,902	-		4,902		(1,516)		-					(1,516)
Sociedade Operadora Portuária de São Paulo S/A	-	-	-		-		(245)				(245)

06.30.20	165,835	-		165,835		(2,238)		(68,950)				(71,188)

Biosev Bioenergia International S.A.	20,174	10,425	30,599		-			(10,852)				(10,852)
Biosev Bioenergia S.A.	486	155	641		(817)		(5)				(822)
Biosev Comercializadora S.A.	6,021	61	6,082		-			-					-
Sociedade Operadora Portuária de São Paulo S/A		-		-		-		-			(195)			(195)

06.30.19		26,681		10,641		37,322		(817)			(11,052)			(11,869)

The tables below show the balances and transactions as at June 30, 2020 between the Company and other related parties:

					Company
					Assets

					Trade			Advances to
		Derivatives (*)		receivables			suppliers			Total
Companies under common control
Louis Dreyfus Company Suisse S.A.	-		16,227	-	16,227
Louis Dreyfus Company Brasil S.A.	-		509	921,351	921,860
Term Commodities Inc.	39,565	-		-	39,565

06.30.20		39,565	16,736	921,351	977,652


Companies under common control
Louis Dreyfus Company Suisse S.A.	-		1,014	-	1,014
Louis Dreyfus Company Brasil S.A.	-		-		885,170	885,170
Term Commodities Inc.	19,112	-		-	19,112
03.31.20		19,112			1,014				885,170		905,296

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

					Consolidated
					Assets

					Trade			Advances to
		Derivatives (*)		receivables			suppliers		Total
Companies under common control
Louis Dreyfus Company Ethanol Merchandising LLC	-		95	-		95
Louis Dreyfus Company Brasil S.A.	-		533	1.743.998		1.744.531
Louis Dreyfus Company Suisse S.A.	-		218.957	-		218.957
Louis Dreyfus Commodities Agroindustrial S.A.	-		24	-		24
Term Commodities Inc.	39.565			115	-		39.680

06.30.20		39.565			219.724	1.743.998	2.003.287


Companies under common control
Louis Dreyfus Company Ethanol Merchandising LLC	-		91	-		91
Louis Dreyfus Company Brasil S.A.	-		-		2.506.685		2.506.685
Louis Dreyfus Company Suisse S.A.	-		2.153	-		2.153
Term Commodities Inc.	19.112			261	-		19.373

03.31.20		19.112			2.505	2.506.685	2.528.302

As at June 30, 2020, the amount of R$37,203 (R$19,112 as at March 31, 2020) was recorded in line item "Short-term investments", relating to margin deposits in derivative transactions.

			Company
			Liabilities

			Trade			Advances from
	Derivatives		payables			customers		Total
Companies under common control
Louis Dreyfus Company Brasil S.A.	-	281	-		281
Louis Dreyfus Company Suisse S.A.	-		-		914,492	914,492

	-		281		914,492	914,773
Jointly-controlled entity
TEAG - Terminal Exp. Açúcar Guarujá Ltda.	-		588	-		588
06.30.20	-		869		914,492		915,361


Companies under common control
Louis Dreyfus Company Brasil S.A.	-	185	-		185
Louis Dreyfus Company Suisse S.A.	-	-	878,580	878,580
Term Commodities Inc.	6,585	-	-		6,585

	6,585	185	878,580	885,350
Jointly-controlled entity
TEAG - Terminal Exp. Açúcar Guarujá Ltda.	-		1,749	-		1,749
	-		1,749		-		1,749

03.31.20	6,585		1,934		878,580		887,099

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

											Consolidated
											Liabilities

											Trade		Advances from
				Derivatives			payables			customers							Total
Companies under common control
Louis Dreyfus Company Brasil S.A.	-		406							-						406
Louis Dreyfus Company Suisse S.A.	1,862	4,657	1,732,798					1,739,317
LDC Trading and Services Co. S.A.		-			512							-						512
			1,862	5,575	1,732,798					1,740,235
Jointly-controlled entity
TEAG - Terminal Exp. Açúcar Guarujá Ltda.	-		4,643							-					4,643
			-			4,643							-						4,643

06.30.20			1,862	10,218	1,732,798					1,744,878

Companies under common control
Louis Dreyfus Company Brasil S.A.	-		309							-						309
Louis Dreyfus Company Suisse S.A.	289	4,251	2,486,605					2,491,145
LDC Trading and Services Co. S.A.	-		243							-						243
Term Commodities Inc.		6,585	-							-						6,585

				6,874	4,803	2,486,605					2,498,282

Jointly-controlled entity
TEAG - Terminal Exp. Açúcar Guarujá Ltda.	-	7,692							-					7,692

				-			7,692							-						7,692
03.31.20			6,874	12,495	2,486,605					2,505,974


																	Company
																	Profit (loss)

											Income													Expenses
									Interest and													Interest and
							exchange rate														exchange rate		Total
				Sales		changes	Total income	Sales			changes			expenses

Companies under common control
Louis Dreyfus Company Brasil S.A.	-					-				-				(243,066)	-			(243,066)
Louis Dreyfus Company Suisse S.A.	270,610				-				270,610			-		-			-
Macrofértil Indústria e Comércio de Fertilizantes Ltda.	-					-				-				(105)	-			(105)
Term Commodities Inc.		-					-				-				(3,871)	-			(3,871)

			270,610				-				270,610			(247,042)	-			(247,042)
Jointly-controlled entity
Teag-Terminal Exp. Açúcar Guarujá Ltda.		-					-				-				(237)	-			(237)

			-					-				-				(237)	-			(237)

06.30.20			270,610				-				270,610			(247,279)	-			(247,279)


Companies under common control

Louis Dreyfus Company Brasil S.A.	-					5,144			5,144			(534,596)	-			(534,596)
Louis Dreyfus Company Suisse S.A.	529,760				-				529,760			-		(4,984)		(4,984)
Term Commodities Inc.		-					-				-				(1,476)	-			(1,476)

			529,760				5,144			534,904			(536,072)	(4,984)		(541,056)
Jointly-controlled entity
Teag-Terminal Exp. Açúcar Guarujá Ltda.		877				-				877			(1,076)	-			(1,076)

			877				-				877			(1,076)	-			(1,076)

06.30.19			530,637				5,144			535,781			(537,148)	(4,984)		(542,132)

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

										Consolidated
										Profit (loss)

						Income										Expenses
						Interest and										Interest and
						exchange rate										exchange rate	Total
			Sales		changes			Total income	Sales			changes		expenses

Companies under common control
LDC Trading and Services Co.S.A.	-		-		-				(370)	(26)		(396)
Louis Dreyfus Company Brasil S.A.	17	-		17			(1,094,483)	-			(1,094,483)
Louis Dreyfus Company Suisse S.A.	1,548,182	10,207	1,558,389			(78,112)	-			(78,112)
Macrofértil Indústria e Comércio de Fertilizantes Ltda.	-		-		-				(185)	-			(185)
Term Commodities Inc.		-			71	71			(4,088)	-			(4,088)

		1,548,199	10,278	1,558,477			(1,177,238)	(26)		(1,177,264)
Jointly-controlled entity
Teag-Terminal Exp. Açúcar Guarujá Ltda.		-			-			-				(3,340)	-		(3,340)

		-			-			-				(3,340)	-		(3,340)

06.30.20		1,548,199	10,278	1,558,477			(1,180,578)	(26)		(1,180,604)

Companies under common control
LDC Trading and Services Co.S.A.	-		3	3			(274)	-			(274)
Louis Dreyfus Company Brasil S.A.	-		21,546	21,546			(628,332)	-			(628,332)
Louis Dreyfus Company Suisse S.A.	837,013	-		837,013			(1,837)	(22,002)		(23,839)
LDC Ethanol Interior Merchandising	-		1	1			-		-			-
Macrofértil Indústria e Comércio de Fertilizantes Ltda.	-		-		-				(674)	-			(674)
Term Commodities Inc.		-			-			-				(1,597)	(4)	(1,601)

		837,013	21,550	858,563			(632,714)	(22,006)		(654,720)

Jointly-controlled entity
Teag-Terminal Exp. Açúcar Guarujá Ltda.	1,941	-		1,941			(1,324)	(1)		(1,325)

		1,941	-		1,941			(1,324)	(1)		(1,325)

06.30.19			838,954	21,550	860,504			(634,038)	(22,007)		(656,045)

a) Compensation of key management personnel

The compensation of officers and other key management personnel for the period is as follows:

Company and Consolidated

	06.30.20	06.30.19

Short-term benefits	6,640	6,453
Long-term benefits	2,302	1,458

	8,942	7,911

The short-term benefits of key management personnel comprise salaries, social security contributions, pension fund contributions, social charges, profit sharing and short-term performance bonus. Long-term benefits include performance bonus and deferred benefits that expired in each financial statements.

21. EQUITY

Capital

The changes in capital are as follows:

	Shares		In thousands of Brazilian reais - R$

	Common		Capital	Capital reserve

03.31.20	1.020.429.426	6.077.674	1.353.937

06.30.20	1.020.429.426	6.077.674	1.353.937

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

22. NET REVENUE AND COST OF SALES AND SERVICES

Company

Three-month period ended

06.30.20 06.30.19

Consolidated

Three-month period

ended

06.30.20 06.30.19

Gross revenue

Domestic market
Sugar	47,709	16,463	60,846	39,582
Ethanol	115,901	425,102	246,356	715,750
Energy	54,008	52,992	130,770	122,160
Other	393	938	12,502	5,616

	218,011	495,495	450,474	883,108

Foreign market
Sugar	213,054	34,489	648,238	252,806
Ethanol	13,850	-	232,886	86,229
Other (a)	515,200	529,759	1,397,168	623,540

	742,104	564,248	2,278,292	962,575

	960,115	1,059,743	2,728,766	1,845,683

Taxes (b)	(23,054)	(57,407)	(57,853)	(126,516)
Sales rebates	(1,231)	(300)	(1,287)	(803)

Net revenue	935,830	1,002,036	2,669,626	1,718,364

Cost of sales and services (c)
Domestic market
Sugar	(37,433)	(19,238)	(48,857)	(30,361)
Ethanol	(113,951)	(309,481)	(234,845)	(526,742)
Energy	(10,666)	(13,447)	(71,274)	(74,523)
Other	(1,791)	(1,335)	(18,260)	(7,888)

	(163,841)	(343,501)	(373,236)	(639,514)
Foreign market
Sugar (d)	(139,286)	(31,088)	(524,619)	(224,373)
Ethanol (d)	(11,475)	-	(168,698)	(88,789)
Other (a)	(538,475)	(534,610)	(1,405,730)	(628,349)

	(689,236)	(565,698)	(2,099,047)	(941,511)


Gains on changes in fair value less estimated costs to sell
biological assets
Sugar	103,553	10,002	123,906	19,842
Ethanol	73,496	61,506	89,923	73,555

	177,049	71,508	213,829	93,397

	(676,028)	(837,691)	(2,258,454)	(1,487,628)

Amounts relating to the export of commodities.
Include government grants, which reduced the taxable base on sales by R$13,006, in Company, in the period ended June 30, 2020 (R$26,834 as at June 30, 2019).
Include PIS and COFINS credits in the amount of R$2,171, in Company, and R$4,503, in Consolidated, in the period ended June 30, 2020 (R$4,471 and R$8,199, as at June 30, 2019, respectively), as prescribed by article 3, of Law 10637/02, which addresses the non-cumulativeness of PIS/PASEP; and article 3, of Law 10833/03, which addresses the non- cumulativeness of COFINS.
Include REINTEGRA credits, in the amount of R$121, in Company, and R$453, in Consolidated, in the period ended June 30, 2020 (R$2,319 and R$2,501, as at June 30, 2019, respectively), as set forth in article 21, of Law 13043, of November 13, 2014, which addresses the REINTEGRA reintroducing.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

23. EXPENSES BY NATURE

The information on the nature of cost of sales and services and general, administrative and selling expenses is as follows:

	Company		Consolidated
	Three-month period		Three-month period
	ended		ended

	06.30.20	06.30.19	06.30.20	06.30.19

Cost of sales and services

Personnel (*)	(49,163)	(64,654)	(117,709)	(114,618)
Depreciation and amortization (**)	(218,131)	(233,363)	(448,243)	(430,344)
Raw materials and inputs, net of taxes:
Raw materials	(29,701)	(54,642)	(231,425)	(230,988)

Inputs and services	(13,941)	(4,793)	(45,893)	(31,659)
Products for resale	(542,141)	(551,747)	(1,629,013)	(773,416)

	(585,783)	(611,182)	(1,906,331)	(1,036,063)

Gains on changes in fair value less estimated costs to sell biological
assets	177,049	71,508	213,829	93,397

	(676,028)	(837,691)	(2,258,454)	(1,487,628)


General, administrative and selling expenses

Personnel (*)	(6,117)	(25,701)	(32,068)	(42,999)
Depreciation	(2,834)	(2,729)	(5,506)	(5,811)
Freight	(15,773)	(5,973)	(54,808)	(26,911)
Services	(12,387)	(11,734)	(31,496)	(19,523)

Shipping expenses	(859)	(259)	(22,919)	(5,392)
Other	(4,530)	(6,241)	(7,870)	(8,601)

	(42,500)	(52,637)	(154,667)	(109,237)

As at June 30, 2020, the personnel expenses, in Company and Consolidated, comprise R$53,592 and R$145,899, respectively (R$88,229 and R$153,445 as at June 30, 2019), and R$1,688 and R$3,878 (R$2,126 and R$4,172 as at June 30, 2019) relating to INSS contribution, respectively.

(**) Includes biological asset and agricultural produce.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

24. FINANCE INCOME (EXPENSES)

		Company			Consolidated
		Three-month period		Three-month period
		ended		ended

Finance income	06.30.20			06.30.19			06.30.20		06.30.19
Discounts obtained	442	24	802	169
Revenue from fixed income short-term investments	814	2,641	1,786	5,553
Interest	3,887	3,660	5,424	5,327
Other		39	843	500	1,918

		5,182	7,168	8,512	12,967

Finance costs
Interest	(81,770)		(73,785)		(156,936)		(145,925)
Discounts granted	-		(37)		(7)		(37)
Tax on Financial Transactions (IOF)	(833)		(506)		(1,368)		(1,481)
Tax on Financial Transactions (IOF) - loan	-		(7)		(173)		(1,109)
Other	(582)		(133)		(1,387)		(402)

Taxes on revenue (PIS and COFINS) on finance income	(197)		(321)		(350)		(577)

	(83,382)		(74,789)		(160,221)		(149,531)


Derivatives

Commodities derivatives - Commercial transactions	(43,180)		51,983	5,022	19,715
Commodities derivatives - Financial transactions	46,160	(10,740)		46,160	(10,740)

Interest rate derivatives - Libor sw ap	-		-			(1,806)		304

	2,980	41,243	49,376	9,279


Exchange rate changes	(171,329)		40,866		(383,428)		76,284


Finance costs	(246,549)		14,488		(485,761)		(51,001)

25. OTHER OPERATING INCOME (EXPENSES)

Company

Three-month period ended

06.30.20 06.30.19

Consolidated

Three-month period ended

06.30.20 06.30.19

Recognition of provision for tax, labor, civil and environmental contingencies	(2,486)	(4,784)	(8,642)	(15,370)
Contratual fines and indemnities	(4,279)	(8,091)	(15,381)	(16,636)
Tax expenses	(1,122)	(2,075)	(3,268)	(1,566)
Reversal of Impairment of fixed assets	141	376	260	1,704
Gains (losses) on sale of property, plant and equipment	85	504	864	5,428
Impairment of assets held for sale	119	(21,060)	119	(21,114)
Reversal (recognition) of estimated losses on doubtful accounts	(7)	(389)	231		(590)
Provision for other losses	(27)	(122)	(3,762)	(58,740)
Other operating expenses, net	1,014	966	1,561	1,759

Total other operating income (expenses), net	(6,562)	(34,675)	(28,018)	(105,125)

Total other operating income	6,348	3,497	8,414	8,409

Total other operating expenses	(12,910)	(38,172)	(36,432)	(113,534)

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

26. LOSS PER SHARE

The basic and diluted loss per share was calculated based on the loss attributable to the Biosev's owners divided by the weighted average number of outstanding common shares in the period.

Loss for the year attributable to the Company's ow ners

Weighted average number of shares used to calculate basic and diluted earnings per share

Total basic and diluted loss per share

	Company			Consolidated
	Three-month period			Three-month period
	ended			ended
06.30.20			06.30.19		06.30.20	06.30.19
(281,213)	(168,821)	(281,213)	(168,821)
474,006,366	386,367,962	474,006,366	386,367,962
(0.59327)	(0.43694)	(0.59327)	(0.43694)

27. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS I - Risk management

The Company is exposed to risks arising from its operations and considers market, credit, liquidity, and capital risks as the most significant risks to which it is exposed.

The objective of the Company's risk management program is to hedge its results against fluctuations in sugar, ethanol and electric power prices, foreign exchange and interest rates. These risks are managed using hedging financial instruments available in the financial market, such as: swaps and interest rate futures; currency forwards, futures and options; and commodity forwards, swaps, futures and options. Transactions carried out in the over-the-counter market are contracted through low-risk domestic and foreign banks. Transactions contracted on the stock exchange market are mainly traded in futures and options markets at the New York Commodities Exchange (NYSE: ICE), Chicago Commodities Exchange (NYSE: CME) and Brasil Bolsa Balcão (B3).

The use of these instruments is guided by the Financial and Risk Management Policy approved and reviewed by the Board of Directors on January 13, 2020. Additionally, the Company does not carry out transactions with any type of leverage, as well as does not have transactions with exotic derivatives.

The risk management policies, practices and instruments are oversight by the Executive Committee and the Strategic Committee (the body that supports the Company's Board of Directors).

The Executive Committee has the following responsibilities before the Board of Directors: (i) monitor the compliance with the policy and report eventual non-compliances; (ii) inform about the indebtness of the Company and its subsidiaries, as well as the related debt instruments; (iii) inform about the burdens on the assets of the Company and its subsidiaries; and (iv) monitor the risk management instruments of the Company and its subsidiaries.

The Risk Management Department is subject to the Chief Financial Officer and is responsible for the calculation, measurement, analysis and monitoring of the exposure, by issuing daily reports based on which the necessary corrective measures are taken. It is also responsible for monitoring the compliance with the risk management policies.

27.1 Market risk

The Company is mainly exposed to risks related to foreign exchange, interest rate and agricultural commodity price fluctuations. In order to hedge against these market risks, the Company uses various derivative financial instruments, including:

Foreign exchange forwards, options and futures to hedge fair value and cash flow items against exchange rate changes;
Interest rate futures to supplement the hedging of such items;
Interest rate swaps to mitigate LIBOR fluctuation risk;

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

Commodity forwards, swaps, futures and options to hedge inventory and future agricultural commodity delivery transactions.

The parameters used to manage these risks are based on hedging strategy monitoring tools, such as sensitivity analysis, stress tests, and a hedging scale, aimed at securing the future amount of sugar and ethanol sales, including the effects from foreign exchange rate, as well as interest rate exposure.

As at June 30, 2020, the assets and liabilities relating to the derivative transactions are broken down as follows:

		Company				Consolidated
	06.30.20		03.31.20		06.30.20		03.31.20

Exchange risk management (Note 27.1.1)	(240.920)	(343.960)	(240.920)	(343.959)
Interest rate risk management (Note 27.1.2)	-		-		(30.702)	(27.963)
Agricultural commodity risk management (Note 27.1.3)	(4.204)	(5.441)	(1.945)	50.155

	(245.124) (349.401) (273.567) (321.767)

Current assets	93.131	225.787	97.252	225.787

Non-current assets	-		-		-		55.885

Current liabilities	(338.255)	(575.188)	(353.256) (586.843)

Non-current liabilities	-		-		(17.563)	(16.596)

27.1.1 Foreign exchange risk management

Because the Company's functional currency is the Brazilian real (R$), the foreign currency-denominated operations are exposed to the foreign exchange risk. Foreign exchange positions are managed based on the Financial and Risk Management Policy, approved by the Company's Board of Directors on January 13, 2020. The Company carries out transactions with currency derivatives in order to reduce variability in its profit or loss due to the existence of US dollar denominated net cash flows from exports, costs and debts.

The Company may also contract derivative financial instruments to hedge its foreign exchange exposure that may impact assets and liabilities, as set forth in the policy.

The Company carries out transactions with interest rate derivatives traded on the B3 (one-day DI futures) in order to supplement foreign exchange rate hedges contracted under foreign exchange contracts traded on said exchange - future dollar financial instruments (DOL) and exchange coupon futures (DDI)). The consolidated use of such future contracts aims at having effects similar to those of one single DOL futures contract. This strategy is adopted by the Company without leverage. This is necessary because an individually traded DOL future contract does not have significant liquidity for terms above three months and, therefore, could not meet the Company's foreign exchange hedging requirements.

This practice is regulated by the B3 and has been widely disseminated among future market participants in Brazil for over a decade.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

The table below shows the Company's NDF, DOL, DI and DDI forward currency sale instruments, used for purposes of hedging foreign exchange risk and respective results:

												Company and Consolidated
												Notional value

			Average exchange
			rate		Foreign currency	Domestic currency (*)	Fair value
			06.30.20		03.31.20			06.30.20		03.31.20				06.30.20		03.31.20		06.30.20	03.31.20

									(Sale) purchase	(Sale) purchase
Outstanding forw ard contracts - NDF US Dollar
Hedge Accounting - Cash Flow
Sale	4,8604	4,2685		(315.213)	(380.500)			(1.532.064)	(1.624.177)		(187.770)	(359.644)

								(315.213)	(380.500)			(1.532.064)	(1.624.177)		(187.770)	(359.644)
Non- Hedge Acccounting

Sale	4,5161	4,6227		(144.787)	(314.500)			(653.866)	(1.453.833)		(137.903)	(190.392)
Purchase	5,2530	4,7351			405.500	425.000			2.130.078	2.012.401			84.813	205.822

									260.713	110.500		1.476.212	558.568	(53.090)	15.430
Futures B3 - Non-hedge Accounting

DOL - dollar futures	5,4760	5,1987		48.750	54.750			266.955	284.629			(1.981)	1.443
DDI - future exchange coupon						(58.304)	(85.160)			(319.272)	(442.721)		1.817	(1.511)

DI - 1 day:							42.955	70.725			235.222	367.677			103	322

									33.401	40.315				182.905	209.585		(60)	254

																			(240.920)	(343.960)

(*) Convenience conversion.

27.1.2 Interest rate risk management

The Company uses Libor derivatives to hedge against interest rate fluctuations. These derivatives are traded on the Brazilian over-the-counter market with low-risk banks as counterparties, and are registered with CETIP S.A. - Balcão Organizado de Ativos e Derivativos (Brazilian organized OTC market), as required by prevailing legislation.

The table below shows the Company's Libor swap instruments with receipt of Libor interest and payment of fixed rates and presents the derivatives used for purposes of hedging Libor interest risk and respective results:

								Consolidated
								Notional value
	Fixed average rate -
		%			Foreign currency	Domestic currency (*)	Fair value
	06.30.20	03.31.20	06.30.20			03.31.20				06.30.20		03.31.20	06.30.20	03.31.20

Hedge Accounting
Outstanding position:
Less than 1 year	3.15%	3.15%	39,967	39,967		218,857	207,775		(13,139)	(11,367)
1 to 2 years	3.15%	3.15%	39,967	39,967		218,857	207,775		(10,870)	(10,659)
2 to 5 years	3.15%	3.15%		56,002	56,002		306,665	291,136		(6,693)	(5,937)

					135,936	135,936		744,379	706,686		(30,702)	(27,963)

(*) Convenience conversion.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

27.1.3 Agricultural commodity risk management

The Company carries out transactions with commodity derivatives (sugar and ethanol) in order to reduce the impact of the changes in the market prices considering that these changes may significantly affect the Company's future sales value. These risks are managed according to the Company's Financial and Risk Management Policy and the hedge strategy monitoring tool which determines the hedge volume and timeframe.

The Company's swaps, forwards, futures and options in the period used for commodity risk hedging and the related results are as follows:

										Company
				Notional value

		Foreign currency		Domestic currency (*)	Fair value

		06.30.20		03.31.20			06.30.20		03.31.20				06.30.20	03.31.20

Sugar futures - ICE
Hedge Accounting - Cash Flow	(112,033)	(138,660)		(613,492)	(720,852)			2,687	(2,026)
Hedge Accounting - Fair Value	132,652	132,652		726,403		689,618			(5,571)	1,600
Non- Hedge Acccounting	56,105	(5,365)		307,229		(27,889)			5,245	(6,159)

		76,724	(11,373)		420,140	(59,123)			2,361	(6,585)
Sugar options - ICE
Non- Hedge Acccounting	-		2,359		-		12,264			-		606

		-		2,359		-		12,264			-		606

Sugar options - OTC
Non- Hedge Acccounting	(9,325)	(10,545)		(51,062)	(54,820)			(6,565)	(836)

		(9,325)	(10,545)		(51,062)	(54,820)			(6,565)	(836)
NDF sugar - OTC
Non- Hedge Acccounting	-		(9,822)		-		(51,062)			-		1,156

		-		(9,822)		-		(51,062)			-		1,156

Ethanol futures - B3

Non- Hedge Acccounting

Sugar futures - ICE

-		(425)	-	(2,211)		-	218

-		(425)	-	(2,211)		-	218

								(4,204)	(5,441)

					Consolidated

		Notional value
Foreign currency	Domestic currency (*)	Fair value
06.30.20		03.31.20		06.30.20		03.31.20		06.30.20		03.31.20

Hedge Accounting - Cash Flow	(112,033)	(138,660)	(613,492)	(720,852)	2,687	(2,026)
Hedge Accounting - Fair Value	132,652	132,652	726,403	689,618	(5,571)	1,600
Non- Hedge Acccounting	56,105	(5,365)	307,229	(27,889)	5,245	(6,159)

	76,724	(11,373)	420,140	(59,123)	2,361	(6,585)
Sugar Sales Agreements
Hedge Accounting - Fair Value	(132,652)	(132,652)	(726,403)	(689,618)	4,121	55,885

	(132,652)	(132,652)	(726,403)	(689,618)	4,121	55,885

Sugar options - ICE
Non- Hedge Acccounting	-		2,359	-		12,264	-	606

	-		2,359	-		12,264	-	606
Sugar options - OTC
Non- Hedge Acccounting	(3,313)	(14,035)	(18,144)	(72,964)	(1,862)	(1,125)

	(3,313)	(14,035)	(18,144)	(72,964)	(1,862)	(1,125)

NDF sugar - OTC
Non- Hedge Acccounting	(9,325)	(9,822)	(51,062)	(51,062)	(6,565)	1,156

	(9,325)	(9,822)	(51,062)	(51,062)	(6,565)	1,156
Ethanol futures - B3
Non- Hedge Acccounting	-		(425)	-		(2,211)	-	218

	-		(425)	-		(2,211)	-	218

								(1,945)	50,155

(*) Convenience conversion.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

27.2 Credit risk

The credit risk is managed through the careful analysis of the customer portfolio, the definition of credit limits, and the ongoing control of outstanding positions. In conformity with the Company's credit policy, using a risk assessment methodology, the Company adopted balanced scorecard techniques. The Company adopts hedging instruments, such as collaterals, pledges and guarantees, to mitigate potential credit exposures. Historically, the Company does not record significant losses in trade receivables.

27.3 Liquidity risk

The Company operates with a liquidity level considered sufficient for its operations and uses a number of sources of funds to finance its activities. In order to cover possible liquidity deficiencies or mismatches between cash and cash equivalents with short-term maturities, the Company has good relationship with first-class banks, in Brazil or abroad, as well as a credit line with its parent. Moreover, the products manufactured by the Company are highly liquid and can be easily sold to generate cash or also be provided as a guarantee for financial transactions. In addition, part of the investments, especially those related to sugarcane plantation treatments, is supported by short-term financing and will be realized in the following harvest campaign.

27.3.1 Liquidity and interest rate tables

The tables below show in detail the expected maturity of the Group's financial liabilities:

					Company
		Less than 1 year		1 to 5 years		Over 5 years	Total
As at June 30, 2020
Borrow ings and financing	421.054	2.638.763	111.494				3.171.311
Lease liability	200.569	454.793	77.023				732.385
Derivative financial instruments	338.255	-		-					338.255

Trade payables	316.809	4.622	-					321.431
Accrued payroll and related taxes	56.607	-		-					56.607
Taxes payable	21.203	18.324	-					39.527
Other payables	68.228		65.195	-				133.423

		1.422.725			3.181.697	188.517	4.792.939
As at March 31, 2020

Borrow ings and financing	2.935.559	67.484	-		3.003.043
Lease liability	215.257	444.809	72.048	732.114

Derivative financial instruments	575.188	-		-		575.188
Trade payables	309.104	5.733	-		314.837

Accrued payroll and related taxes	47.218	-		-		47.218
Taxes payable	21.314	18.501	-		39.815

Other payables	80.594		86.047	-				166.641

		4.184.234			622.574	72.048	4.878.856


					Consolidated
		Less than 1 year			1 to 5 years			Over 5 years			Total
As at June 30, 2020
Borrow ings and financing	1.168.611	6.478.724		114.573					7.761.908
Lease liability	477.464	1.067.174		148.545					1.693.183
Derivative financial instruments	353.256	17.563		-					370.819
Trade payables	690.168	4.857		-					695.025
Accrued payroll and related taxes	110.115	-		-					110.115
Taxes payable	69.442	18.324		-					87.766
Other payables	114.509		135.643		-					250.152

		2.983.565			7.722.285		263.118				10.968.968
As at March 31, 2020

Borrow ings and financing	7.225.234	96.191		-				7.321.425
Lease liability	498.932	1.029.154		153.183				1.681.269
Derivative financial instruments	586.843	16.596		-				603.439
Trade payables	798.903	5.965		-				804.868
Accrued payroll and related taxes	90.483	-		-				90.483
Taxes payable	75.152	18.501		-				93.653
Other payables	118.051		167.247		-					285.298

		9.393.598			1.333.654		153.183				10.880.435

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

27.4 Capital risk

The Company manages its capital structure in order to safeguard a continuous return to the Company's shareholders. Company monitors capital through financial leverage index analysis; these indexes include adjusted net debt to adjusted EBITDA ratio. In turn, the net debt corresponds to total borrowings and financing (including short- and long-term borrowings and financing), less cash, cash equivalents, short-term investments and highly liquid inventory (ethanol, sugar and allowance for negative inventory margin).

The Company allocates the Libor swap contracts (see Note 27.1.2) to the adjusted net debt for capital risk analysis purposes.

The Company may change its capital structure, in conformity with economic and financial conditions, aiming at optimizing its financial leverage and/or debt management.

27.5 Margin calls

Derivative transactions in commodity exchanges (ICE and B3) require an initial margin call in guarantee.

To trade on the ICE, the margin call required, as at June 30, 2020, is R$32,652 (R$7,376 as at March 31, 2020), fully deposited by the Company's in cash, through fiduciary agent Term Commodities Inc., a company under common control.

To trade on the B3, the margin call required, as at June 30, 2020, is R$13,716 (R$26,502 as at March 31, 2020), deposited as Bank Deposit Certificate (CDB), in the amount of R$10,000 and R$11,371, in current account.

As at June 30, 2020, the Company's transactions in the over-the-counter market did not require an initial margin call in guarantee.

27.6 Categories of financial instruments

The financial instruments recorded in the balance sheet, such as cash and cash equivalents and borrowings and financing, are stated at contractual values, which approximate their fair values due to their short terms and/or characteristics.

The fair value of financial instruments not traded in active markets (for example, over-the-counter derivatives) is determined using valuation techniques. The Company uses several methods and makes assumptions that are based on existing market conditions at the end of the interim financial statements. The fair value of foreign exchange forwards is determined based on forward exchange rates quoted at the end of the interim financial statements.

The use of different market inputs and/or valuation techniques might result in amounts different from the recognized realizable value of financial instruments.

	Classification		Company		Consolidated
	CPC 48 / IFRS 9	06.30.20	03.31.20	06.30.20	03.31.20

Financial assets:
Cash and cash equivalents (Note 3)	Amortized cost	114.802	396.124	359.383	1.174.943
Short-term investments and debentures (Note 4)	Amortized cost	58.701	42.052	69.858	52.245
Trade receivables (Note 5)	Amortized cost	245.044	211.537	462.710	216.242
Derivatives designated as fair value hedge or not (Note 27)	VJR	90.444	225.676	94.564	281.561
Derivatives designated as cash flow hedge (Note 27)	VJORA	2.687	111	2.688	111

Financial liabilities:		-			-
Borrow ings and financing (Note 16)	Amortized cost	3.171.311	3.003.043	7.761.908	7.321.425
Lease liability (Note 12)	Amortized cost	732.385	732.114	1.693.183	1.681.269
Trade payables (Note 17)	Amortized cost	321.431	314.837	695.025	804.868
Other financial liabilities	Amortized cost	229.557	253.674	448.033	469.434
Derivatives designated as fair value hedge or not (Note 27)	VJR	65.583	361.781	67.444	389.743
Derivatives designated as cash flow hedge (Note 27)	VJORA	272.672	213.407	303.375	213.696

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

27.7 Measurement at fair value recognized in balance sheet

CPC 40 (R1) - Instrumentos Financeiros: Evidenciação/IFRS 7 - Financial Instruments: Disclosure defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the primary or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. CPC 40 (R1)/IFRS 7 also establishes a three-level fair value hierarchy, which prioritizes inputs for fair value measurement by an entity in order to maximize the use of observable data and minimize the use of unobservable data. CPC

40 (R1)/IFRS 7 describes the three levels of inputs that should be used to measure fair value, which are the following:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2 - Inputs other than the data included in Level 1, where prices are quoted (unadjusted).

Fair value measurements of Level 2 are obtained based on other variables besides quoted prices included in Level 1, which are directly or indirectly observable for an asset or liability.

Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs) because market activity is insignificant or does not exist.

The Company's financial assets and liabilities measured at fair value on a recurring basis and subject to disclosure as required by CPC 40 (R1)/IFRS 7, as at June 30, 2020, are as follows:

		Company										Consolidated
				06.30.20										06.30.20
		Level 1			Level 2		Total		Level 1		Level 2		Total
Financial assets at fair value through profit or loss
Derivative financial assets	2,374	90,757	93,131	2,374	94,878	97,252

	2,374			90,757				93,131				2,374			94,878	97,252


Financial liabilities at fair value through profit or loss
Derivative financial liabilities	(2,435)	(335,820)		(338,255)		(2,434)		(368,385)		(370,819)

	(2,435)	(335,820)		(338,255)		(2,434)		(368,385)		(370,819)


		Company										Consolidated
				03.31.20										03.31.20
		Level 1			Level 2		Total		Level 1		Level 2		Total
Financial assets at fair value through profit or loss
Derivative financial assets	15,885	209,902	225,787	15,886	265,786	281,672

	15,885			209,902				225,787		15,886			265,786		281,672


Financial liabilities at fair value through profit or loss
Derivative financial liabilities	(22,000)	(553,188)		(575,188)		(21,999)		(581,440)		(603,439)

	(22,000)	(553,188)		(575,188)		(21,999)		(581,440)		(603,439)

27.8 Derivative and non-derivative financial instruments with the application of hedge accounting

In accordance with accounting practices adopted in Brazil, derivative financial instruments are accounted for at fair value through profit or loss, unless a derivative is designated for hedge accounting. A derivative only qualifies for hedge accounting when all the conditions set out by CPC 48/IFRS 9 are met. The adoption of hedge accounting is optional and aims at recognizing gains or losses on derivatives and debts only when the hedged item is realized on an accrual basis and, therefore, reducing the volatility of gains or losses from the mark-to-market of derivatives.

The Company applies hedge accounting to account for part of its derivative and non-derivative financial instruments.

27.8.1 Cash flow hedge

The cash flow hedge is characterized by the protection of a recognized liability (debt) and highly probable transactions (exports of sugar and ethanol expressed in US dollars) under CPC 48/IFRS 9, items 6.3.3/9 6.2.2. The hedge instruments are described below:

Recognized liability hedge: swap contracts subject to the Libor interest rate contracted to mitigate the effects from interest rate changes of the long-term debts, in which case the respective exposure is subject to a fixed interest rate; and

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

Highly probable transaction hedge: i) sugar futures contracts for purposes of price risk hedge; and ii) currency forward contracts (NDF) and US dollar-denominated debts (Natural HACC), both contracted to protect against exchange rate changes in the revenue from exports.

27.8.2 Fair value hedge

Such hedge comprises the use of "sugar futures" derivative instruments to protect against changes in fair value in connection with a sugar sales agreement.

27.8.3 Discontinued hedge accounting

As at March 31, 2019, the Company discontinued the revenue hedge accounting program (Natural HACC) with respect to the debts already designated. Such discontinuity resulted from the change in the Company's foreign exchange risk management, which aimed to offset the exchange rate changes of the debts against equity, which will be directly recorded in the finance income (costs) to be offset against the long positions expressed in foreign currency using derivative financial instruments - also recognized in finance income (costs) (CPC 48, items B6.5.26 (a) and B6.5.28 (b)).

The gains and losses recorded in equity, in line item "Other comprehensive income (loss), will be maintained in this reserve until the expected transaction is concluded, in which case the amounts will be reclassified to operating income (revenues) - aligned with revenues. In the event such transaction (revenue) is not concluded, the accumulated amounts will be fully reclassified to finance income (costs) under CPC 48.

As at June 30, 2020, the annual expected realization of derivatives recorded in equity is as follows:

												Company
	Hedge		Impact	2020/2021		2021/2022		2022/2023		2023/2024		2024/2025	2025 to 2028	Total
Exchange rate changes on future interest flow s (*)	Finance income (costs)		(3,861)	(3,854)	(2,367)	(1,226)	(733)	(759)		(12,800)

					(3,861)	(3,854)	(2,367)	(1,226)	(733)	(759)		(12,800)


											Consolidated
	Hedge		Impact	2020/2021		2021/2022		2022/2023		2023/2024		2024/2025	2025 to 2028	Total
Exchange rate changes on future interest flow s (*)	Finance costs	(3,861)	(3,854)	(2,367)	(1,226)	(733)	(759)		(12,800)
Natural HACC	Operating losses		(60,692)	(79,173)	(79,173)	(25,544)	-	-		(244,582)

					(64,553)	(83,027)	(81,540)	(26,770)	(733)	(759)		(257,382)

(*) Program discontinued in prior years.

27.8.4 Sensitivity analysis

The table below shows the Company's sensitivity to the presented risk factor, based on changes in the risk factor considered reasonably possible by management (probable scenario).

The probable scenario is obtained based on future dollar, sugar and ethanol (as at June 30, 2020) and the Group's expectations for each one of the variables indicated, over a twelve-month period.

As required by CVM Instruction 475/2008, the sensitivity analysis is also presented to changes in the fair value of financial instruments for another two scenarios, in which market conditions are stressed by 25% and 50%.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

The derivative financial instruments are provided to hedge against risks from future cash flows. The non-derivative financial instruments must not be considered as the Company's net exchange exposure because the table below does not consider the biological asset, as it is not a financial instrument, but it is used in the production of sugar and ethanol for future exports. See Notes 7 and 27.8.

						Company
		Notional amount						Effects on fair value

		Foreign currency		Risk factor				Probable scenario		25% stress	50% stress
Effects on profit or loss	(371.128)		Increase in US$	(1.148.020)	(1.644.418)	(3.268.915)
Exchange risk	176.119			Decrease in price	(302.583)	(256.589)	(531.973)
Sugar hedge accounting		176.119			Decrease in price	(302.583)	(256.589)	(531.973)

Effects on equity		(195.009)			(1.450.603)	(1.901.007)	(3.800.888)

Exchange risk		(315.213)		Increase in US$	(133.688)	(191.523)	(383.045)
Price risk	(112.033)		Increase in price	(178.259)	(152.536)	(305.072)
Sugar hedge accounting		(112.033)		Increase in price	(178.259)	(152.536)	(305.072)

Effects on equity		(427.246)			(311.947)	(344.059)	(688.117)

					Consolidated
		Notional amount						Effects on fair value

		Foreign currency			Risk factor				Probable scenario		25% stress	50% stress
Exchange risk	(913.647)			Increase in US$	(3.239.547)		(4.641.017)		(9.261.614)
Price risk	44.219			Decrease in price	(523.050)		(446.431)		(903.415)
Sugar hedge accounting		44.219			Decrease in price	(523.050)		(446.431)		(903.415)

Effects on equity		(869.428)				(3.762.597)		(5.087.448)		(10.165.029)

Exchange risk		(315.213)			Increase in US$	(133.688)		(191.523)		(383.045)
Price risk	(112.033)			Increase in price	(178.259)		(152.536)		(305.072)
Sugar hedge accounting	(112.033)			Increase in price	(178.259)		(152.536)		(305.072)
Interest rate risk		135.935			Decrease in Libor rate	(343)		(685)		(1.370)

Effects on equity		(291.310)				(312.290)		(344.744)		(689.487)

As at June 30, 2020, the probable scenario considers the CDI rate projected for 12 months - disclosed at B3's website (DI swap reference rates x PRÉ) and the Libor rate for 12 months disclosed by Bloomberg. These rates were applied in the Company's exposure volume - composed of: borrowings and financing, advances from customers, cash and cash equivalents and short-term investments.

Based on the exposure in the probable scenario, a stress of 25% and 50% was applied taking into account the worst case scenarios in order to determine the impact on the Company's finance income (costs).

The consolidated sensitivity results are broken down below:

				Company
		Notional		Probable
		amount		scenario		25% stress	50% stress

Operations indexed to CDI	(240,649)	(10,699)	(24,072)	(26,747)
Operations indexed to Lib	or	(698,693)	(13,360)	(30,060)	(33,400)

Total	(939,342)	(24,059)	(54,132)	(60,147)

				Consolidated
		Notional		Probable
		amount		scenario		25% stress	50% stress

Operations indexed to CDI	(360,303)	(27,081)	(60,932)	(67,703)
Operations indexed to Lib	or	(2,266,615)	(43,173)	(97,139)	(107,932)

Total	(2,626,918)	(70,254)	(158,071)	(175,635)

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

28. COMMITMENTS a) Selling

The Group has several arrangements in the sugar and ethanol market under which it commits to sell volumes of these products in future crops. As at June 30, 2020, the volumes of these commitments total 1,750,036 tons of sugar (1,693,385 tons of sugar as at March 31, 2020), 480,268 cubic meters of ethanol (211,440 cubic meters as at March 31, 2020), and electricity supply commitments, assumed in power auctions and free market, which total 7,125 GWh to be supplied by 2035 (7,595 GWh as at March 31, 2020).

(b) Purchases

The Group has several commitments for the purchase of sugarcane from third parties to ensure part of its production in future crops. The volume of sugarcane to be purchased is estimated based on the expected productivity of the areas where the sugarcane plantations are located. The amount to be paid by the Group is determined at the end of each harvest campaign according to the price published by CONSECANA, plus or less other applicable contractual terms.

As at June 30, 2020, estimated purchase commitments by crop are as follows:

								Consolidated
				Area			Estimated quantity of			Estimated
	Harvest			(hectares)			cane (ton)			amount

2020/2021	140,181		10,337,768		861,697
2021/2022	88,059		6,458,077		538,308
2022/2023	63,855		4,682,435		390,301
2023/2024	47,907		3,396,903		283,146
	After 2024		46,300			3,112,495			259,440
		386,302	27,987,678	2,332,893

The Group has commitments for the purchase of energy in the amount of 779 GWh (1,048 GWh as at March 31, 2020). The price of these agreements is bilaterally negotiated by the agents selling electric energy in the Free Trade Market (ACL).

c) Terminal de Exportação de Açúcar do Guarujá Limitada - TEAG

TEAG is a party to an agreement for the lease of a port terminal with Companhia Docas do Estado de São Paulo ("CODESP"), which provides for the payment by TEAG, as lease, of a fixed monthly installment of R$3,1137/m² calculated on a minimum area of 74,206.410 m² equivalent to R$231.06 per month or R$2,773 per year, plus a guaranteed variable minimum installment equivalent to R$5,328 per year payable to CODESP, corresponding to R$2.8400/ton calculated on a minimum handling of one million and five hundred thousand tons of cargo. TEAG operates under the concession agreement entered into with Companhia Docas do Estado de São Paulo (CODESP), falling due on July 6, 2038.

d) Lawsuits against Instituto do Açúcar e do Álcool - IAA

The Company is a plaintiff in lawsuits seeking a compensation from the Federal Government for losses arising from pricing differences incurred in the period in which sugar and ethanol prices were frozen. In some cases, upon effective receipt of the indemnities, a portion of the amount received will be transferred on behalf of third parties in connection with the contractual obligations.

e) Bank guarantees and collateral insurance

As at June 30, 2020, the balances of (i) bank guarantee is R$142,789 in Consolidated (R$142,240 in Consolidated as at March 31, 2020); and (ii) collateral insurance relating to lawsuits of R$250,624, in Company, and R$603,454 in Consolidated (R$277,600 and R$588,780 as at March 31, 2020, respectively).

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

29. EMPLOYEES' BENEFIT

The consolidated amount invested by the Company in the pension plan was R$364 in the period ended June 30, 2020 (R$347 as at June 30, 2019), recognized in line item "General, administrative and selling expenses". Due to the features and design of the pension plan, the Company does not incur any future postemployment or actuarial obligations.

As at June 30, 2020, the Company booked a liability related to the deferred variable compensation that will be paid to some eligible employees, according to the policy, in the amount of R$22,474 (R$26,021 as at March 31, 2020). Additionally, the Company has recorded a liability related to PPR (Profit Sharing Program), as set forth in the Collective Labor Agreement, in the amount of R$9,718 (R$31,550 as at March 31, 2020).

30. SEGMENT INFORMATION

Information by product margin, and geographic areas, used by the key decision makers is as follows:

						Consolidated
						Three-month period ended 06.30.20

Consolidated profit (loss) by product	Sugar	Ethanol	Energy	Other	Total
Net revenue	702,109	441,787		116,882		1,408,848		2,669,626
Cost of sales and services	(449,570)	(313,620)	(71,274)	(1,423,990)	(2,258,454)

Gross profit	252,539	128,167		45,608		(15,142)	411,172


Gross margin	36%	29%	39%	-1%	15%
Selling expenses	(60,692)	(17,379)	(2,619)	(260)	(80,950)

Operating margin	191,847	110,788		42,989		(15,402)	330,222


						Consolidated

						Three-month period ended 06.30.20

Sales by geographic area	Sugar	Ethanol	Energy	Other	Total
Asia			524,266		157,772			-			1,269,103		1,951,141
North America	21,592		48,943			-			-			70,535
South America	-		26,171			-			-			26,171
Africa	100,202		-			-			4,797		104,999
Europe	2,178		-			-			123,268		125,446

Foreign market	648,238		232,886			-			1,397,168		2,278,292

Domestic market	53,871		208,901			116,882		11,680		391,334

TOTAL	702,109		441,787			116,882		1,408,848		2,669,626

						Consolidated

						Three-month period ended 06.30.19

Consolidated profit (loss) by product	Sugar	Ethanol	Energy	Other	Total
Net revenue	285,757	696,154	108,007	628,446	1,718,364
Cost of sales and services	(234,892)	(541,976)	(74,523)	(636,237)	(1,487,628)

Gross profit	50,865	154,178	33,484	(7,791)	230,736

Gross margin	18%	22%	31%	-1%	13%
Selling expenses	(25,568)	(7,338)	(2,343)	-		(35,249)

Operating margin	25,297	146,840	31,141	(7,791)	195,487

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

					Consolidated
					Three-month period ended 06.30.19

Sales by geographic area		Sugar	Ethanol	Energy	Other	Total
Asia	135.403	-		-		512.390	647.793
North America	114.983	86.229	-		-		201.212
Africa		2.420	-		-		-		2.420
Europe		-		-		-		111.150	111.150

Foreign market		252.806	86.229	-		623.540	962.575

Domestic market		32.951	609.925	108.007	4.906	755.789

TOTAL		285.757	696.154	108.007	628.446	1.718.364

The Company's key decision makers use the operating margin as a tool to measure the recurring operating cash generation capacity and it also allows comparisons with other companies.

Consolidated

Three-month period ended

06.30.2006.30.19

Operating margin	330,222	195,487
Other operating expenses	(104,671)	(182,588)
Finance costs	(485,761)	(51,001)
Income tax and social contribution	(21,081)	(130,792)

Loss for the period	(281,291)	(168,894)

Information on key customers

In the period ended June 30, 2020, the Group has one customer, its related party Louis Dreyfus Company Suisse S.A., under common control, which accounts for 58% of the Group's consolidated revenue.

31. APPROVAL OF INTERIM FINANCIAL STATEMENTS

The interim financial statements were approved by the Company's Management and authorized for issue on September 17, 2020.

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

NON-STATUTORY AUDIT COMMITTEE OPINION

The non-statutory Audit Committee of Biosev S.A. ("Company"), jointly with representatives of the Company and of BDO RCS Auditores Independentes, independent auditors of the Company, examined the interim financial statements of the Company related to the period ended on June 30 th, 2020. Based in the analysis performed and considering the draft of the audit report, without remarks, prepared by BDO RCS Auditores Independentes, the non-statutory Audit Committee of the Company recommended to the Board of Directors of the Company, unanimously and without remarks, the approval of the referred interim financial statements.

São Paulo, September 16 th, 2020

FEDERICO ADRIAN CERISOLI

PATRICK JULIEN TREUER

ADRIAN LIMA DA HORA

Biosev S.A.

Notes to the Interim Financial Statements

For the Three-month Period Ended June 30, 2020

(Amounts in thousands of Brazilian reais, unless otherwise stated)

OPINIONS AND STATEMENTS

As Executive Officers of Biosev SA, we declare under, Article 25, Paragraph 1 st, Item V and VI, CVM Instruction 480 of December 7, 2009, as amended, that we reviewed, discussed and agreed with the interim financial statements and the terms of the external auditors report on the interim financial statements related to the period ended on June 30 th, 2020.

São Paulo, September 17 th, 2020

Juan Jose Blanchard

Chief Executive Officer

Leonardo Oliveira D'Elia

Chief Financial and Investor Relations Officer

Ricardo Lopes da Silva

Chief Operating Officer

HISTORICAL OPERATIONAL RECORDS

São Paulo, September 17, 2020 - Biosev, one of the world's largest sugarcane processors, announces

its results for the first quarter of the 2020/21 crop.

1Q21 HIGHLIGHTS

Historical operational records for the period:
- Crushing volume totaled 11.6 million tons in the 1Q21, 6.9% higher than in 1Q20;
- Product TRS totaled 129.0 kg TRS/ton, an increase of 10.6% compared to 1Q20;
- Total Product TRS was 1,498 thousand tons, an increase of 18.3% compared to 1Q20, mainly due to the 739 thousand tons of sugar produced, also a record for the period;
Consolidated agricultural yield (TCH) increased by 2.9% to 94.5 ton/ha in the quarter;
Sugar mix was 51.6% in the 1Q21, due to its higher profitability in relation to ethanol, an increase of 17.9 p.p. compared to 1Q20. Anhydrous mix was 33.3%, in line with the same period of the previous crop;
Industrial efficiency increased by 3.1% to 1.042 in the quarter.
Net Revenue ex-HACC/other produts of R$ 1.3 billion, 13.8% higher than in 1Q20;
Net Operating Result was an income of R$ 186.5 million in the 1Q21, compared to the net operating result that was an expense of R$ 13.2 million in 1Q20.
Adjusted EBITDA ex-resale/HACC totaled R$369.1 million, an increase of 8.9%; EBITDA per unit was R$31.7 per ton, an increase of 1.8% and EBITDA Margin was 33.9%, stable compared to 1Q20;

B3: BSEV3

Stock price on 9/16/2020: R$5.00 | Number of shares: 1,020,429,426 | Market cap: R$5.1 billion

Conference Call in Portuguese with translation into English: September 18, 2020

12:00 p.m. (Brasília - BRT) | 10:00 a.m. (NY - EST) | 3:00 p.m. (London - GMT) Portuguese: (11) 3181-8565 | English: +1 (412) 717-9627

Code: Biosev

Investor Relations

E-mail:ri@biosev.com

Telephone: (11) 3092-5291

http://ri.biosev.com

1. OPERATING PERFORMANCE

The following table presents key indicators for operating efficiency, productivity and production volumes, which are analyzed in this section:

Efficiency and Productivity	1Q21	1Q20	%

Crushing (thousand tons)	11,633	10,883	6.9%
TCH (ton/ha)	94.5	91.8	2.9%
Product TRS (Kg TRS/ton)	129.0	116.6	10.6%
Industrial efficiency	1.042	1.011	3.1%

Production	1Q21	1Q20	%

Sugar mix (%)	51.6%	33.7%	17.9 p.p.
Ethanol mix (%)	48.4%	66.3%	-17.9 p.p.
Anhydrous mix (%)	33.3%	33.7%	-0.4 p.p.
Production (thousand tons of Product TRS) ¹	1,498	1,266	18.3%
Sugar (thousand tons)	739	408	81.4%
Ethanol (thousand m³)	426	494	-13.8%
Cogeneration (GWh)	344.5	311.1	10.7%

Considers the ratios of conversion of sugar and ethanol in the State of São Paulo, as disclosed in the Consecana Manual.

In order to improve the management of both industrial and agricultural assets, as from the 2020/21 crop, the Company changed the composition of its clusters. The Ribeirão Preto Norte cluster is now composed by the Continental and Lagoa da Prata plants and the Ribeirão Preto Sul cluster is now composed by the Santa Elisa, Leme, Vale do Rosário and MB (Morro Agudo) plants.

1.1. Crushing

The following table shows crushing volume on a consolidated basis and by cluster:

Efficiency	1Q21	1Q20	%

Crushing ('000 tons)	11,633	10,883	6.9%
Own	6,935	6,558	5.7%
Third Parties	4,698	4,325	8.6%
Ribeirão Preto Norte Cluster	2,175	1,838	18.3%
Ribeirão Preto Sul Cluster	6,798	6,222	9.3%
Mato Grosso do Sul Cluster	2,660	2,823	-5.8%

The Company reached total crushing volume of 11.6 million tons in 1Q21, historical record for the period, which represented an increase of 6.9% compared to 1Q20, mainly reflecting the higher yield measured by TCH (+2.9%), favorable (drier) weather conditions during the harvest period (April to June), and improved operational performance, partially offset by the frost mitigation strategy at the Mato Grosso do Sul Cluster.

At the Ribeirão Preto Norte Cluster, crushing volume was 2.2 million tons, 18.3% higher than in 1Q20, mainly supported by the 5.4% increase in TCH and improved operational performance.

At the Ribeirão Preto Sul Cluster, crushing volume was 6.8 million tons, 9.3% higher than in 1Q20, mainly supported by the 6.2% increase in TCH and improved operational performance.

At the Mato Grosso do Sul Cluster, crushing volume was 2.7 million tons, 5.8% lower than in 1Q20, reflecting the Company's strategy to mitigate the effects from the frost that affected the region in the previous crop and in the first quarter of the current crop (accelerating harvest and crushing operations as from the second quarter of the previous crop to mitigate impacts on sucrose quality and accumulation), which consequently reduced the cluster's TCH by 5.5% in 1Q21.

1.2. Tons of Cane per Hectare (TCH)

The following table shows the evolution in TCH on a consolidated basis and by cluster:

Productivity	1Q21	1Q20	%
TCH - Agricultural yield (ton/ha)	94.5	91.8	2.9%
Ribeirão Preto Norte Cluster	97.1	92.2	5.4%
Ribeirão Preto Sul Cluster	99.4	93.6	6.2%
Mato Grosso do Sul Cluster	83.3	88.2	-5.5%

Cane yield measured by consolidated TCH reached 94.5 ton/ha in the first quarter of the 2020/21 crop, 2.9% higher than in the first period of the previous crop, which is basically explained by the application of best agronomic practices in crop regeneration to the sugar plantations, such as vinasse handling, organic fertilization, foliar treatments, among others, in addition to the favorable weather conditions during the field development period (January to March), partially offset by the frost that affected the region of the Mato Grosso do Sul Cluster in the second quarter of the previous crop and the first quarter of the current crop.

1.3. Product Total Recoverable Sugar (TRS)

The following table shows the evolution of Product TRS and by cluster:

Productivity	1Q21	1Q20	%

Product TRS (Kg TRS/ton)	129.0	116.6	10.6%
Ribeirão Preto Norte Cluster	131.6	121.2	8.6%
Ribeirão Preto Sul Cluster	128.9	117.3	9.9%
Mato Grosso do Sul Cluster	127.1	112.0	13.5%

Product TRS content was 129.0 kg TRS/ton in the 1Q21, historical record for the period, an increase of 10.6% compared to 1Q20, which reflects the continuous impacts of the evolution of the phytosanitary quality of the sugarcane crop, the quality of the harvesting processes, the intensive use of ripening agents, an improved operational performance and favorable (drier) weather conditions during the harvest, which favors concentration of sugar content.

Industrial efficiency reached 1.042 in the quarter, an increase of 3.1% compared to 1Q20. The results demonstrate the higher efficiency in converting cane into the final products of sugar and ethanol, as well as the lower losses in production processes. Industrial efficiency is calculated based on the volume of TRS produced by the mills.

Total production in tons of Product TRS was 1,498 thousand tons, historical record for the period, an increase of 18.3% compared to 1Q20, mainly due to the evolution of the sugarcane crop and industrial efficiency gains (+3.1%).

Sugar mix was 51.6%, due to the higher allocation of TRS to sugar production, given the product's higher profitability in the period compared to ethanol, an increase of 17.9 p.p. compared to the same period of the previous crop, which was more focused on ethanol (mix of 66.3% in 1Q20).

Anhydrous mix (anhydrous ethanol as a share of total ethanol production) was 33.3% in 1Q21, in line with 1Q20, reflecting the commercial strategy to focus on higher-value products, including ethanol by- products.

1.4. Cogeneration

The following table presents productivity and cogeneration volume for sale:

Production	1Q21	1Q20	%
Total Cogen (GWh)	344.5	311.1	10.7%
Cogen for Sale (GWh)	344.5	311.1	10.7%
Ribeirão Preto Norte Cluster	45.9	33.3	37.9%
Ribeirão Preto Sul Cluster	165.8	145.1	14.2%
Mato Grosso do Sul Cluster	132.8	132.7	0.0%
Cogen for Sale/Crushing (kWh/ton)	32.5	31.0	4.9%
Ribeirão Preto Norte Cluster	40.7	33.9	20.0%
Ribeirão Preto Sul Cluster	24.4	23.3	4.6%
Mato Grosso do Sul Cluster	49.9	47.0	6.2%

The Company has cogeneration power plants at all its eight industrial sites and is energy self-sufficient during the harvesting period. Out of these units, seven produce surplus electricity for sale.

Total cogeneration for sale in 1Q21 increased by 10.7% compared to 1Q20, and reached a volume of

344.5 GWh, mainly due to the higher crushing volume compared to the previous period (+6.9%).

The cogeneration volume of the MS Cluster, despite lower crushing volume (-5.8%) compared to 1Q20, remained in line with the previous crop, which reiterates the superior industrial efficiency of the cluster in the period (+4.9%), in line with 1Q20. The cogeneration volume of the other clusters increased by 18.7% on average, compared to 1Q20.

The productivity of cogeneration units measured in kWh of power sold per ton of cane crushed stood at

32.5 kWh/ton in 1Q21, an increase of 4.9% compared to 1Q20. These results reflect the higher total crushing volume and the Company's strategy to optimize sales by prioritizing products and periods that generate higher added value.

2. ECONOMIC AND FINANCIAL PERFORMANCE

2.1. Net Revenue

Net revenue excluding the non-cash effects from the hedge accounting of foreign currency-denominated debt (HACC) amounted to R$2.7 billion, the Company's record quarterly revenue, an increase of 53.4% compared to 1Q20. The result is primarily explained by the growth in sugar export volumes, the higher crushing volume, the higher industrial efficiency in sugarcane conversion, the higher average ethanol export prices, and the revenues from export performance contracts associated with the rollover of foreign currency-denominated debt obligations, with these factors partially offset by the decrease in ethanol import volumes, the average sugar export prices, and by the fact that previous crop included revenue from the Nordeste Cluster. Note that, excluding the revenue from the Nordeste Cluster in the previous crop to improve the comparison with the current crop, net revenue would be 53.9% higher than in 1Q20.

Excluding the effects from resale operations (of finished products, such as (i) sugar, ethanol and energy; and (ii) other commodities, which are required to comply with export performance contracts associated with obligations denominated in foreign currency), the Company's net revenue was R$1.1 billion, an increase of 9.7% compared to 1Q20, mainly due to the growth in sugar and ethanol export volumes and the higher average ethanol export prices, partially offset by the decrease in ethanol import volumes and respective average price and by the fact that previous crop included revenue from the Nordeste Cluster. Note that, excluding the revenue from the Nordeste Cluster in the previous crop to improve the comparison with the current crop, net revenue would be 10.3% higher than in the 1Q20.

The following table presents a breakdown of net revenue ex-HACC:

Net revenue ex-HACC (R$ thousand)	1Q21	1Q20	%


Sugar	715,593	311,464	129.8%
Domestic market	53,871	32,951	63.5%
Export market	661,722	278,513	137.6%
Ethanol	446,785	704,315	-36.6%
Domestic	208,901	609,925	-65.7%
Export market	237,884	94,390	152.0%
Energy	116,882	108,007	8.2%
Total	1,279,259	1,123,786	13.8%
Other Products	1,408,848	628,446	124.2%
Bagasse, services and others	11,680	4,906	138.0%
Export performance contracts	1,397,168	623,539	124.1%
Total	2,688,107	1,752,231	53.4%

1Q20 includes amounts from the Nordeste Cluster.

Revenue from resale operations is detailed in the following table:

Resale operations (R$ thousand)		1Q21		1Q20		%


Sugar, ethanol and energy ¹		202,214		136,579		48.1%
Export performance contracts	1,397,168		623,539		124.1%
Total	1,599,382		760,118		110.4%

Revenue from resales of sugar, ethanol and energy is accounted for in the lines corresponding to the respective products in the table of Net Revenue ex-HACC.

The following charts present a breakdown of net revenue ex-HACC, excluding the effects from hedge accounting and revenue from export performance contracts, by product and by market in the respective periods:

Net revenue ex-HACC/export performance

by product (%)

Net revenue ex-HACC/export performance

by market (%)

The following table presents the sugar and ethanol inventory balance variation when compared to the beginning of each crop, showing a higher carry out when compared to the same period of the previous crop due to the Company's strategy to optimize sales by prioritizing periods that capture higher value added:

Inventories - Variation	1Q21	1Q20	%


Sugar ('000 tons)	278	196	42%
Ethanol ('000 m3)	232	149	55%

2.1.1. Sugar

Net revenue from sugar sales excluding the non-cash effects from the hedge accounting of foreign currency-denominated debt (HACC) amounted to R$715.6 million, an increase of 129.8% compared to the 1Q20, mainly due to the higher export volumes, partially offset by the lower average prices. This variation reflects (i) the production mix, which prioritized sugar, given the product's higher profitability in the period compared to ethanol; (ii) higher crushing volume; (iii) improved operational performance, which translates into higher efficiency in sugarcane conversion; and (iv) average prices of the product in the international market, compared to the previous crop.

The following chart presents a comparison of sugar volumes and average prices, excluding the non-cash effects from the hedge accounting of foreign currency-denominated debt (HACC):

Volume (thousand tons) and Average Price (R$/ton)

The following charts present a breakdown by type of sugar, excluding the non-cash effects from the hedge accounting of foreign currency-denominated debt (HACC):

Net Revenue ex-HACC

by Sugar Type (%)

2.1.2. Ethanol

Net revenue from ethanol sales excluding the non-cash effects from the hedge accounting of foreign currency-denominated debt (HACC) amounted to R$446.8 million, a decrease of 36.6% compared to the 1Q20, when the sales volume in the period decreased 38.5% due to a shift in the sugar mix and higher carry out in the period.

The price increased 3.2% when compared to 1Q20, although the average market price decreased 12%, especially due to the increase in ethanol exports due to the Company's strategy to optimize sales by prioritizing products and periods that capture higher value added, reflecting the ethanol competitiveness in the foreign market, improved by the depreciation in the Brazilian real against the U.S. dollar. Note that, excluding the revenue from the Nordeste Cluster in the previous crop to improve the comparison with the current crop, net revenue would be 36.1% lower than in the 1Q20.

The following chart presents a comparison of ethanol sales volumes and average prices, excluding the non-cash effects from the hedge accounting of foreign currency-denominated debt (HACC):

Volume (thousand m³) and Average Price (R$/m³)

The following chart presents a breakdown of revenue by type of ethanol, excluding the non-cash effects from the hedge accounting of foreign currency-denominated debt (HACC):

Net Revenue ex-HACC

by Ethanol Type (%)

2.1.3. Energy

Net revenue from energy was R$116.9 million, an increase of 8.2% compared to the 1Q20. This variation is mainly due to the higher sales volume impacted by the higher crushing volume and partially offset by lower average sales prices in the period of 3%, which were less than the decrease in the average market price of 43%.

The following chart presents a comparison of energy own sales volume and average own sales price.

Sales Volume (GWh) and Average Sales Price (R$/MWh) - Own

2.1.4. Other products

The line item "Other products" records revenue from sales of raw bagasse, services and other items, in addition to revenue from the sale of commodities in the spot market to fulfill export contracts with the aim of settling debt obligations in foreign currency.

Revenue from the sale of other products totaled R$1.4 billion, an increase of 124.2% compared to the 1Q20, mainly due to the growth in the above-referred export performance contracts.

2.2. Cost of Goods Sold (COGS)

The Company has continued to consistently deliver cost reductions, while consolidating initiatives to adjust structures and become more resilient in an environment of still highly challenging pricing.

In nominal terms, cash COGS ex-resale totaled R$552.7 million, an increase of 6.2% compared to 1Q20, due to higher sales volumes, increase of 10.4% in the CONSECANA price index in the period, and advanced recognition of raw material costs in view of the higher crushing volume (to be compensated later in the crop), partially offset by the reductions in operating costs under the ongoing process to streamline costs and structures.

COGS per unit was R$672 per ton, an increase of 4.5% compared to 1Q20, mainly impacted by the increase of 10.4% in the CONSECANA price index in the period, and advanced recognition of raw material costs in view of the higher crushing volume (to be compensated later in the crop).

The following tables present a breakdown of total COGS and cash COGS:

COGS and cash COGS (R$ thousand) ³	1Q21	1Q20	%


Total COGS	(2,297,420)	(1,513,659)	51.8%
Non-cash items	(115,711)	(219,571)	-47.3%
Depreciation and amortization	(329,540)	(312,968)	5.3%
Gains (losses) in biological assets ¹	213,829	93,397	128.9%
Cash COGS	(2,181,709)	(1,294,088)	68.6%
Personnel	(117,709)	(114,618)	2.7%
Raw materials ²	(388,420)	(373,024)	4.1%
Inputs	(46,567)	(33,030)	41.0%
Resale of goods	(1,629,013)	(773,416)	110.6%
Sugar, ethanol and energy	(223,888)	(145,068)	54.3%
Export performance contracts	(1,405,125)	(628,348)	123.6%
Cash COGS ex-resale	(552,696)	(520,672)	6.2%

Gains (losses) from the fair value adjustment less estimated cost of sales of biological assets. ² Sugarcane, lease and HLT. ³ Excluding the effect from IFRS16.

Cash COGS ex-resale (R$ thousand) ¹	1Q21	1Q20	%


Agricultural costs	(462,563)	(447,808)	3.3%
HLT (own + third-party cane)	(142,020)	(163,949)	-13.4%
Land lease	(114,450)	(110,822)	3.3%
Purchases of third-party cane	(206,093)	(173,036)	19.1%
Industrial costs	(76,103)	(56,454)	34.8%
Others	(14,030)	(16,411)	-14.5%
Cash COGS ex-resale	(552,696)	(520,672)	6.2%
Product TRS sold ex-resale (thousand tons)	823	810	1.6%
Cash COGS ex-resale (R$/ton)	(672)	(643)	4.5%

¹ Excluding the effect from IFRS16.

2.3. Selling, General and Administrative (SG&A) Expenses

SG&A expenses totaled R$149.7 million, an increase of 43.9% compared to 1Q20.

Selling expenses totaled R$80.9 million, an increase of 129.7% compared to 1Q20, due to the difference in the composition of the sales mix in the period, focused on the sugar mix and the increase in exports, which increased the demurrage and port storage expenses.

General and administrative expenses totaled R$68.7 million, in line with with 1Q20, mainly due to the effects from the ongoing process to streamline operating and organizational structures, fully offset against the increase in consulting expenses in the period.

Depreciation expenses recognized under SG&A expenses totaled R$5.0 million in 1Q21, compared to R$5.3 million in 1Q20.

The following table presents a comparison of cash SG&A expenses between periods:

Cash SG&A (R$ thousand) ¹	1Q21	1Q20	%


Selling	(80,950)	(35,249)	129.7%
Freight	(54,808)	(26,911)	103.7%
Shipping charges	(22,919)	(5,392)	325.1%
Commissions, wharfage and other	(3,223)	(2,946)	9.4%
General and administrative	(68,753)	(68,765)	0.0%
Personnel	(32,068)	(42,999)	-25.4%
Services	(31,496)	(19,523)	61.3%
Other	(5,189)	(6,243)	-16.9%
Cash SG&A	(149,703)	(104,014)	43.9%

¹ Excluding the effect from IFRS16.

2.4. EBITDA

The following table presents a breakdown of Adjusted EBITDA ex-resale/HACC:

EBITDA composition (R$ thousand) ⁴	1Q21	1Q20	%

Net revenue	2,669,626	1,718,364	55.4%
Cash COGS	(2,181,709)	(1,294,088)	68.6%
Gross profit (cash)	487,917	424,276	15.0%
Cash SG&A	(149,703)	(104,014)	43.9%
TEAG - profit or loss ¹	(835)	(1,375)	-39.3%
Other operating income (expenses)	(28,018)	(105,125)	-73.3%
Non-recurring items	11,665	78,168	-85.1%
Adjusted EBITDA	321,026	291,930	10.0%

Adjusted EBITDA margin	12.0%	17.0%	-5.0 p.p.
Resale effect ²	29,631	13,298	122.8%
HACC effect ³	18,481	33,868	-45.4%
EBITDA ex-resale/HACC	369,138	339,095	8.9%
EBITDA margin ex-resale/HACC	33.9%	34.2%	-0.3 p.p.
Crushing (thousand tons)	11,633	10,883	6.9%
Adjusted EBITDA per unit (R$/ton)	27.6	26.8	2.9%
EBITDA per unit ex-resale/HACC (R$/ton)	31.7	31.2	1.8%

Equivalent to the share of 50% held in the Guarujá Sugar Terminal (TEAG). ² Reverses the impacts of resale of sugar, ethanol, energy and export performance operations. ³ Reverses the non-cash effects from the hedge accounting of foreign currency-denominated debt. ⁴ Excluding the effect from IFRS16.

Adjusted EBITDA ex-resale/HACC (which excludes from the net revenue calculation the effects from resale operations, the non-cash hedge accounting of foreign currency-denominated debt, and IFRS 16) totaled R$369.1 million, with EBITDA margin of 33.9% and EBITDA per unit of R$31.7 per ton, mainly due to the increase in net revenue by virtue of the operational improvements, partially offset by the increase in COGS and SG&A expenses, reflecting the impact of 10.4% in the CONSECANA price index in the period and the changes in the sales mix composition.

The following table presents a reconciliation of Adjusted EBITDA with the Income Statement in the periods:

EBITDA reconciliation (R$ thousand)	1Q21	1Q20	%

Profit or loss for the year/period	(281,291)	(168,894)	66.5%
Income tax and social contribution	21,081	130,792	-83.9%
Financial expenses, net	485,762	51,001	852.5%

Depreciation, amortization and depletion	453,749	436,155	4.0%
EBITDA CVM 527	679,301	449,054	51.3%
Losses (gains) in biological assets ¹	(213,829)	(93,397)	128.9%
Concession amortization - TEAG	2,100	2,100	0.0%
Non-recurring items	11,665	78,168	-85.1%
IFRS16 impacts	(158,211)	(143,995)	9.9%
Adjusted EBITDA	321,026	291,930	10.0%
Adjusted EBITDA Margin	12.0%	17.0%	-5.0 p.p.

¹ Losses (gains) from the fair value adjustment less estimated cost of sales of biological assets.

2.5. Hedge

The following table shows the aggregate position of our hedged sugar volumes and prices (via commodity and foreign exchange derivative contracts) as at June 30, 2020:

Hedge on 06/30/2020	20/21 Crop	21/22 Crop


Sugar (#NY11)
Volume ('000 tons)	1,036	470
Average Price (cUS$/lb)	13.13	13.81
FX (US$)
Amount (US$ million)	306	115
Average Price (R$/US$)	4.455	4.278

Hedged Price (cR$/lb) w/o Pol.

Hedged Price (cR$/lb) w/ Pol.

Exposure Hedged (%) - Net Consecana

58.49 59.09

60.95 61.57

88.0% 54.0%

2.6. Financial Results

Excluding the effects from exchange variation, the net financial result was an expense of R$62.6 million, compared to an expense of R$93.3 million in 1Q20. The variation is mainly explained by the higher gains from the settlement and mark-to-market adjustment of derivatives positions, partially offset by the lower interest income from short-term investments in the period.

Including exchange variation, the net financial result was an expense of R$446.0 million in 1Q21. Exchange variation had a negative impact mainly due to the 5.3% depreciation of the Brazilian real against the U.S. dollar; in 1Q20, the net financial result was an expense of R$17.0 million, positively impacted by exchange rate changes (a 1.7% appreciation of the Brazilian real against the U.S. dollar), as shown in the following table:

PTAX in the period	1Q21	1Q20	%

Initial - as at March 31	5.1987	3.8967	33.4%
Final - as at June 30	5.4760	3.8322	42.9%
Variation	5.3%	-1.7%	7.0 p.p.

The following table shows the changes in the financial income (expenses) between the periods:

Financial income (expenses) (R$	1Q21	1Q20	%
thousand) ¹

Net financial expenses	(446,007)	(16,994)	2524.5%
Exchange rate changes (FX)	(383,429)	76,284	-602.6%
Financial expenses before FX	(62,578)	(93,278)	-32.9%
Interest expenses	(117,181)	(111,918)	4.7%
Income from short-term investments	1,786	5,553	-67.8%
Derivative transactions	49,376	9,279	432.1%
Other income (expenses)	3,441	3,808	-9.6%

Excluding the effect from IFRS16.

2.7. Profit or Loss for the Period

Net loss for the period totaled R$280.8 million, compared to a loss of R$163.7 million in 1Q20. In view of the aforementioned factors, net loss for the period was mainly caused by exchange variation, which was partially offset by higher net revenues and higher gains from the settlement and mark-to-market adjustment of derivatives.

3. INVESTMENTS

The Company invested R$242.8 million in the period, a decrease of 5.8% compared to 1Q20. This variation reflects the strategy to cut costs and increase competitiveness, based on the pillars of managing cane fields for greater longevity and productivity, and crop treatment systems that maximize the use of inputs produced by the Company's own units.

The investments were again concentrated in planting and treatment, partially offset by lower allocations to industrial maintenance. The costs resulted from higher plantation volume and largest cultivation area, impacted by the exchange rate changes in input costs.

Investments (R$ thousand) ¹	1Q21	1Q20	%

Expansion	3,254	2,629	23.8%
Operations	236,137	232,860	1.4%
Industrial	11,361	3,675	209.1%
Agriculture	665	18,469	-96.4%
Planting	115,596	112,048	3.2%
Treatment	106,114	92,216	15.1%
Other	2,401	6,451	-62.8%
Intercrop deferred costs	3,413	22,210	-84.6%
CAPEX	242,805	257,699	-5.8%

1Q20: Ex-NE cluster for comparion purposes.

4. EBITDA LESS CAPEX

EBITDA less CAPEX is presented in the table below:

(R$ thousand) ¹	1Q21	1Q20	%

EBITDA ex-resale/HACC	369,138	339,095	8.9%
CAPEX	242,805	257,699	-5.8%
EBITDA ex-resale/HACC less CAPEX	126,333	81,396	55.2%

Excluding the effect from IFRS16.

5. DEBT

The Company's gross debt totaled R$7.8 billion as at June 30, 2020, an increase of 31.8% compared to June 30, 2019, mainly due to the effect from the 42.9% depreciation of the Brazilian real against the U.S. dollar on the dollar-denominated portion of its debt.

The balance of cash and short-term investments totaled R$429 million, out of which 55.7% was denominated in U.S. dollar. This variation reflects the Company's strategy to optimize sales by prioritizing products and periods that capture higher value added.

In view of the aforementioned factors, net debt totaled R$7.3 billion, an increase of 36.0% compared to the position as at June 30, 2019.

The following table presents a breakdown of the debt position:

Debt (R$ million) ¹	06/30/2020	06/30/2019	Variation

Gross debt	(7,762)	(5,891)	31.8%
Short term	(1,169)	(436)	168.2%
Long term	(6,593)	(5,455)	20.9%
Cash and short-term investments	429	498	-13.7%
Net debt	(7,333)	(5,393)	36.0%
Adjusted EBITDA LTM	2,141	1,704	25.7%
Net debt/adjusted EBITDA LTM	3.42x	3.17x	8.2%
¹ LTM: last twelve months

The following charts present a breakdown of debt by index and instrument as at June 30, 2020, as well as the cash position and short-term investments by currency:

The hedged position related to foreign currency indebtedness on June 30, 2020 was USD 252.5 million.

The following chart shows the cash position and debt amortization schedule:

6. CAPITAL MARKETS

At the closing of 1Q21, the Company's market capitalization totaled R$3.4 billion. Its stock performance in the last 12 months compared to Ibovespa is shown below:

Performance BSEV3 versus IBOV

Source: Bloomberg, June 30, 2020

7. APPENDICES

7.1. IFRS16

The IFRS 16/CPC 06 (R2) Leases standard, adopted as of April 1, 2019, changed accounting for lease agreements and agricultural partnerships, which are now treated similarly to financing transactions related to the acquisition of 'right of use of assets,' and payments for which, previously recorded as operating costs and expenses, are now recognized as depreciation or amortization and financial expenses.

	Before		IFRS16	After	Before	IFRS16	After
Statement of Profit and Loss (R$	IFRS16		effects	IFRS16	IFRS16	effects	IFRS16
thousand)
		1Q21			1Q20


GROSS REVENUE	2,728,766		-	2,728,766	1,845,683	-	1,845,683
Taxes and sales deductions	(59,140)		-	(59,140)	(127,319)	-	(127,319)
NET REVENUE	2,669,626		-	2,669,626	1,718,364	-	1,718,364
COGS	(2,297,420)		38,966	(2,258,454)	(1,513,659)	26,031	(1,487,628)
Depreciation and amortization	(329,540)		(118,703)	(448,243)	(312,968)	(117,376)	(430,344)
Raw materials	(388,420)		156,995	(231,425)	(373,024)	142,036	(230,988)
Industrial inputs and services	(46,567)		674	(45,893)	(33,030)	1,371	(31,659)
GROSS PROFIT	372,206		38,966	411,172	204,705	26,031	230,736
OPERATING INCOME (EXPENSES)	(185,677)		57	(185,620)	(217,896)	59	(217,837)
SG&A expenses	(154,724)		57	(154,667)	(109,296)	59	(109,237)
Depreciation and amortization	(5,021)		(485)	(5,506)	(5,282)	(529)	(5,811)
Other	(5,189)		542	(4,647)	(6,243)	588	(5,655)
Equity income (loss) in subsidiaries	(2,935)		-	(2,935)	(3,475)	-	(3,475)
Other operating income (expenses)	(28,018)		-	(28,018)	(105,125)	-	(105,125)
PROFIT (LOSS) BEFORE FINANCIAL	186,530		39,022	225,552	(13,191)	26,090	12,899
RESULT

Net financial income (expenses)	(446,007)		(39,755)	(485,762)	(16,994)	(34,007)	(51,001)
Financial Income	8,512		-	8,512	12,967	-	12,967
Financial Expenses	(120,466)		(39,755)	(160,221)	(115,524)	(34,007)	(149,531)
Interest Expenses	(117,181)		(39,755)	(156,936)	(111,918)	(34,007)	(145,925)
Derivatives	49,376		-	49,376	9,279	-	9,279
FX Variation	(383,429)		-	(383,429)	76,284	-	76,284
PROFIT (LOSS) BEFORE TAXES ON	(259,478)		(732)	(260,210)	(30,185)	(7,917)	(38,102)
INCOME

Income tax and social contribution	(21,330)		249	(21,081)	(133,484)	2,692	(130,792)
NET INCOME (LOSS)	(280,808)		(483)	(281,291)	(163,669)	(5,225)	(168,894)

7.2. Statement of Profit and Loss for the Period

Statement of Profit and Loss (R$ thousand)	1Q21	1Q20	%

GROSS REVENUE	2,728,766	1,845,683	47.8%
Taxes and sales deductions	(59,140)	(127,319)	-53.5%
NET REVENUE	2,669,626	1,718,364	55.4%
Cost of sales	(2,258,454)	(1,487,628)	51.8%
GROSS PROFIT	411,172	230,736	78.2%
OPERATING INCOME (EXPENSES)	(185,620)	(217,837)	-14.8%
General and administrative	(73,717)	(73,988)	-0.4%
Selling	(80,950)	(35,249)	129.7%
Equity income (loss) in subsidiaries	(2,935)	(3,475)	-15.5%
Other operating income (expenses)	(28,018)	(105,125)	-73.3%
PROFIT (LOSS) BEFORE FINANCIAL RESULT	225,552	12,899	1648.6%
Net financial income (expenses)	(485,762)	(51,001)	852.5%
Financial income	8,512	12,967	-34.4%
Finance expenses	(160,221)	(149,531)	7.1%
Derivatives	49,376	9,279	432.1%
Exchange rate changes	(383,429)	76,284	-602.6%
PROFIT (LOSS) BEFORE TAXATION	(260,210)	(38,102)	582.9%
Income tax and social contribution	(21,081)	(130,792)	-83.9%
PROFIT (LOSS) FOR THE PERIOD	(281,291)	(168,894)	66.5%

7.3. Balance Sheet - Assets

ASSETS (RS thousand)	06/30/2020	03/31/2020	%

CURRENT ASSETS
Cash and cash equivalents	359,383	1,174,943	-69.4%
Short-term investments	69,858	52,245	33.7%
Derivative financial instruments	97,252	225,787	-56.9%
Trade receivables	448,749	202,050	122.1%
Inventories	2,755,825	2,948,633	-6.5%
Biological assets	775,238	663,908	16.8%
Recoverable taxes	153,299	158,777	-3.5%
Other receivables	100,907	88,170	14.4%

Assets held for sale	37,777	45,165	-16.4%
Total current assets	4,798,288	5,559,678	-13.7%
NON-CURRENT ASSETS
Trade payables	59,136	56,602	4.5%
Escrow deposits	383,113	385,413	-0.6%
Recoverable taxes	82,003	57,529	42.5%
Derivative financial instruments	-	55,885	-100.0%
Deferred income tax and social contribution	856,718	872,971	-1.9%
Other receivables	319,104	320,012	-0.3%
Right to use leasehold assets	1,588,562	1,577,379	0.7%
Investments	157,457	160,393	-1.8%
Property, plant and equipment	3,266,705	3,477,391	-6.1%
Intangible assets	920,138	921,964	-0.2%
Total non-current assets	7,632,936	7,885,539	-3.2%
TOTAL ASSETS	12,431,224	13,445,217	-7.5%

7.4. Balance Sheet - Liabilities and Equity

LIABILITIES AND EQUITY (R$ thousand)	06/30/2020	03/31/2020	%

CURRENT LIABILITIES
Borrowings and financing	1,168,611	7,225,234	-83.8%
Liabilities from lease operations	477,464	498,932	-4.3%
Advances from domestic customers	140,694	28,128	400.2%
Advances from foreign customers	2,292,160	2,585,641	-11.4%
Trade payables	690,168	798,903	-13.6%
Accrued payroll and related taxes	110,115	90,483	21.7%
Taxes payable	69,442	75,152	-7.6%
Derivative financial instruments	353,256	586,843	-39.8%

Other payables	114,509	118,051	-3.0%
Total current liabilities	5,416,419	12,007,367	-54.9%
NON-CURRENT LIABILITIES
Borrowings and financing	6,593,297	96,191	6754.4%
Liabilities from lease operations	1,215,719	1,182,337	2.8%
Advances from foreign customers	-	626,116	-100.0%
Trade payables	4,857	5,965	-18.6%
Deferred income tax and social contribution	36,383	36,883	-1.4%
Derivative financial instruments	17,563	16,596	5.8%
Provision for tax, labor, civil and environmental contingencies	308,175	294,668	4.6%
Taxes payable	18,324	18,501	-1.0%
Other payables	135,642	167,247	-18.9%
Total non-current liabilities	8,329,960	2,444,504	240.8%
EQUITY
Paid-in capital	6,077,674	6,077,674	0.0%
Capital reserve	1,353,937	1,353,937	0.0%
Accumulated losses	(8,448,523)	(8,167,310)	3.4%
Other comprehensive income (loss)	(304,343)	(277,132)	9.8%
Total equity attributable to shareholders	(1,321,255)	(1,012,831)	30.5%
Non-controlling interest	6,100	6,177	-1.2%
Total equity	(1,315,155)	(1,006,654)	30.6%
TOTAL LIABILITIES AND EQUITY	12,431,224	13,445,217	-7.5%

7.5. Statement of Cash Flows

Cash Flows (R$ thousand)	06/30/2020	06/30/2019	%


CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period	(281,291)	(168,894)	66.5%
Non-cash transactions	837,922	868,922	-3.6%
Depreciation and amortization	453,749	436,155	4.0%
Exchange, interest rate and commodities risk management	162,191	174,662	-7.1%
Losses (gains) in biological assets ¹	(213,829)	(93,397)	128.9%
Interest, exchange rate changes and inflation adjustments, net	487,071	56,974	754.9%
Losses (gains) on hedge operations	(41,228)	29,330	-240.6%
Deferred income tax and social contribution	29,770	133,575	-77.7%

Other non-cash transactions	(39,802)	131,623	-130.2%
Decrease (increase) in assets	244,540	(1,323,910)	-118.5%
Increase (decrease) in liabilities	(1,346,573)	340,758	-495.2%
Interest paid on borrowings and financing	(89,809)	(157,889)	-43.1%
Net cash provided by (used in) operating activities	(635,211)	(441,013)	44.0%
CASH FLOW FROM INVESTING ACTIVITIES
Decrease (increase) in short-term investments	(17,484)	67,830	-125.8%
Decrease (Increase) in provision for investment loss	1	-	100.0%
Additions to lease agreements	(136,139)	(1,617,191)	-91.6%
Increase in property, plant and equipment	(117,123)	(95,124)	23.1%
Additions to biological assets	(126,968)	(113,227)	12.1%
Increase in intangible assets	(190)	(6,475)	-97.1%
Net cash provided by (used in) investing activities	(397,903)	(1,764,187)	-77.4%
CASH FLOW FROM FINANCING ACTIVITIES
Additions to lease liabilities	136,170	1,617,191	-91.6%
Payment of lease liabilities	31,527	(136,814)	-123.0%
Borrowings and financing	859,770	1,912,948	-55.1%
Payment of borrowings and financing	(778,384)	(1,921,867)	-59.5%
Net cash provided by (used in) financing activities	249,083	1,471,458	-83.1%
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(784,031)	(733,742)	6.9%
Cash and cash equivalents at the beginning of the period	1,174,943	1,189,112	-1.2%
Cash and cash equivalents at the end of the period	390,912	455,370	-14.2%

Losses (gains) from the fair value adjustment less estimated cost of sales of biological assets.

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Biosev SA published this content on 18 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 September 2020 07:24:01 UTC

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Exclusive: Shell, Cosan JV Raizen taps banks for mega-IPO in Brazil - sources	21-03-29	RE
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Transcript : Biosev S.A., Q3 2021 Earnings Call, Feb 12, 2021	21-02-12
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Raizen S.A. agreed to acquire Biosev S.A. from Louis Dreyfus Holding B.V. and others.	21-02-07	CI
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Transcript : Biosev S.A., Q2 2021 Earnings Call, Nov 13, 2020	20-11-13
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Transcript : Biosev S.A., Q1 2021 Earnings Call, Sep 18, 2020	20-09-18
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Transcript : Biosev S.A., Q4 2020 Earnings Call, Jul 28, 2020	20-07-28
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